More than a quarter-million mortgaged homes regained equity in the third quarter, putting a big dent in the number of properties underwater, according to the Q3 2017 home equity analysis report issued by CoreLogic Thursday.
With 260,000 mortgaged properties regaining equity between Q2 and Q3, U.S. homeowner equity improved by nearly $1 trillion. Those numbers represent a nearly 12 percent uptick in equity value among mortgage owners nationally.
“Homeowner equity increased by almost $871 billion over the last 12 months, the largest increase in more than three years,” said Dr. Frank Nothaft, chief economist for CoreLogic. “This increase is primarily a reflection of rising home prices, which drives up home values, leading to an increase in home equity positions and supporting consumer spending.”
The total number of mortgaged homes in negative equity also decreased since Q2. Underwater homes dropped 9 percent to 2.5 million, according to the report. That’s just about 5 percent of all mortgaged properties. Negative equity peaked at 26 percent of mortgaged residential properties in Q4 2009.
Year-over-year, U.S. homeowners gained an average of $14,888 in home equity. Western states led the increase, while no state experienced a decrease, the report found. Washington homeowners gained the most equity‒‒an average of approximately $40,000 since last year. California came a close second, with homeowners gaining an average of approximately $37,000 in home equity since this time in 2016. Year over year, negative equity decreased 22 percent.
Frank Martell, president and CEO of CoreLogic, said that while homeowner equity is rising nationally, there are wide disparities by geography
“Hot markets like San Francisco, Seattle and Denver boast very high levels of increased home equity,” Martell said. “However, some markets are lagging behind due to weaker economies or lingering effects from the great recession.
Those markets, Martell said include large metros, such as Miami, Las Vegas and Chicago, but also many small- and medium-sized, markets such as Scranton, Pennsylvania, and Akron, Ohio.