• The percentage of negative equity homes dropped to 7.1 percent in the U.S., or roughly 3.6 million homes.
  • Economists at CoreLogic believe home prices will rise another 5 percent over the year, which would free up another 700,000 residential properties from negative equity.
  • The NYC metro rounded out the top five metros with the highest percentage of residences in negative equity.

Corelogic’s quarterly equity report shows 548,000 residential properties in the U.S. regaining equity in the second quarter of 2016, while the total number of mortgaged residential properties with equity sat at 47.2 million.

Of the 47.2 million mortgaged residential properties, 17 percent (8.7 million) were considered under-equitied, the report shows. This percentage of borrowers has less than 20 percent home equity.

“Home value gains have played a large part in restoring home equity,” CoreLogic Chief Economist Dr. Frank Nothaft wrote in the report.

The CoreLogic Home Price Index showed 5.2 percent growth through June. Dr. Nothaft credits home price growth with helping the number of negative equity homeowners to drop by 850,000 in the second quarter from the previous year.

There is an even smaller percentage of near-negative equity properties. Near-negative equity refers to homes with less than 5 percent equity. Only 1.9 percent of properties are in this category, but they are at higher risk should home prices suddenly decline, according to CoreLogic.

However, the amount of negative equity homes dropped 8.9 percent over the quarter. The amount of homes underwater is only 7.1 percent of the total, or roughly 3.6 million homes.

screen-shot-2016-09-26-at-2-23-39-pm

Nevada has the highest percentage of negative equity residential properties, at 15.3 percent of the total. Florida, Maryland, Illinois and Arizona round out the top five cities with the most negative equity.

Residential properties with equity account for 98.3 percent of all properties in Texas, which was good for best in the nation. Alaska, Colorado, Hawaii and Utah are also ranked in the top five.

“We see home prices rising another 5 percent in the coming year based on the latest projected national CoreLogic Home Price Index. Assuming this growth is uniform across the U.S., that should release an additional 700,000 homeowners from the scourge of negative equity,” CoreLogic President and CEO Anand Nallathambi said in the report.

The report also shows that the national average loan-to-value (LTV) ratio is 56 percent. The 700,000 homes Nallathambi is talking about are the 1.4 percent share of homes with LTV of 100 to 105 percent.

New York

The NYC metro rounded out the top five metros with the highest percentage of residences in negative equity. CoreLogic counted 1.637 million residences for the New York City metro area. Out of that number, 5.9 percent are in negative equity.

metros with highest negative equity rate

The average LTV in the NYC metro area is 48.4 percent, while the entire state’s is slightly lower, at 46.4 percent.

Email Britt Chester

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription