Homes With Positive Equity on the Rise

In their latest equity report, CoreLogic has released new data showing more encouraging numbers for the U.S. housing market. In the first quarter of 2015, consistently rising home prices resulted in 254,000 properties regaining positive equity status, bringing the percentage of negative-equity homes down to 10.2%! Comparatively, in the last quarter of 2014, 5.4 million homes (10.8% of mortgages) had negative equity. This increase in wealth represents a hopeful trend for both the housing market and the wider national economy.

While the overall trend across the nation is positive, there is a huge amount of variation between states regarding home equity. To illustrate this point, compare the five states with the highest percentage of positive equity mortgages to the five with the highest percentage of negative equity mortgages:

States With Highest Percentage of Mortgages With Positive Equity

  1. Texas: 97.7%
  2. Hawaii: 96.9%
  3. Alaska: 96.8%
  4. Montana: 96.8%
  5. North Dakota: 96.2%

States With Highest Percentage of Mortgages With Negative Equity

  1. Nevada: 23.1%
  2. Florida: 21.2%
  3. Illinois: 16.8%
  4. Arizona: 16.8%
  5. Rhode Island: 15.7%

As you can see, the five best-performing states all have nearly 100% of mortgages possessing positive equity, whereas the number for the worst-performing state, Nevada, is hovering around 77%. In fact, the bottom five states, representing 10% of state housing markets, together accounted for over 30% of all mortgages with negative equity.

There was also significant variation in equity status between houses falling into different price ranges. Higher-end properties were the most likely to be in positive territory, with 94% of homes valued at greater than $200,000 possessing positive equity. Conversely, just 85% of houses worth less than $200,000 were found to have positive equity in the report.

CoreLogic CEO Anand Nallathambi is hopeful about the continuing trend of rising home equity, saying “With the economy improving and home owners building equity, albeit slowly, the potential exists for an increase in housing stock available for sale, which would ease the current imbalance in supply and demand. There are still about 5 million home owners who are underwater and we estimate that a further 5 percent appreciation in home values across the U.S. would reduce the number of owners with negative equity by about one million.”

Source: Report: 90% of Properties Now Have Equity

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