The most recent of CoreLogic's quarterly reports on Americans' home equity shows that, nationwide, homeowners with mortgages (approximately 63% of all properties, according a 2016 American Community Survey) have experienced an equity increase of almost $620 billion since 2019's Q2. That is an increase of 6.6%, year over year.
During Q2 of this year, the national number of residential properties with mortgages with negative equity decreased by 5.4% from the first quarter to 1.7 million homes, or 3.2%.
On a year-over-year basis, negative equity fell by 15% from 2.1 million homes, or 3.8% of all mortgaged properties, in the second quarter of 2019," CoreLogic analysts said.
"The CoreLogic Home Price Index registered a 4.3% annual rise in prices through June, which supported an increase in home equity,” said Dr. Frank Nothaft, Chief Economist for CoreLogic. “In our latest forecast, national home price growth will slow to 0.6% in July 2021 with prices declining in 11 states. Thus, home equity gains will be negligible next year, with equity loss expected in several markets."
In relation to the recent and predicted future effects of COVID-19, CoreLogic reported the following:
"Despite a cool off in April, home-purchase activity remained strong in the second quarter of 2020 as prospective buyers took advantage of record-low mortgage rates. This, coupled with constricted for-sale inventory, helped drive home prices up and add to borrower equity through June. However, with unemployment expected to remain elevated throughout the remainder of the year, CoreLogic predicts home price growth [1] will slow over the next 12 months and mortgage delinquencies [2] will continue to rise. These factors combined could lead to an increase of distressed-sale inventory, which could put downward pressure on home prices and negatively impact home equity."
The national aggregate value of negative equity is down quarter-over-quarter by about $0.7 billion from Q1, and it is down year-over-year by about $20 billion since this time in 2019.
Negative equity of mortgaged residential properties peaked at 26% in the fourth quarter of 2009, based on the CoreLogic equity data collected starting in the third quarter of 2009.
"Homeowners’ balance sheets continue to be bolstered by home price appreciation, which in turn mitigated foreclosure pressures,” said Frank Martell, President and CEO of CoreLogic. “Although the exact contours of the economic recovery remain uncertain, we expect current equity gains, fueled by strong demand for available homes, will continue to support homeowners in the near term."
The CoreLogic Homeowner Equity Insights report, according to CoreLogic, is published quarterly with coverage at the national, state and Core Based Statistical Area (CBSA)/Metro level and includes negative equity share and average equity gains. The report features an interactive view of the data using digital maps to examine CoreLogic homeowner equity analysis through the second quarter of 2020, and it can be found in full, here [3].