Tag Archives: Home Equity

As of the end of 2013, CoreLogic estimates the number of mortgaged residential properties with equity totaled about 42.7 million, representing a share of about 86.7 percent. Due to a slowdown in the quarterly growth rate of the company's Home Price Index, the share of homes with equity versus underwater homes was mostly unchanged from Q3 to Q4.

Outstanding home finance balances increased for the third straight month in January, signaling what might be the start of a long-term resurgence in borrowing, Equifax reported in its most recent National Consumer Credit Trends release. “American consumers have shed more than $1.5 trillion in mortgage debt since the start of the financial crisis and only now seem interested in investing in housing again,” said Amy Crews Cutts, chief economist.

For the first time in years, the national negative equity rate dipped below 20 percent to close out 2013, Zillow revealed Friday in its quarterly Negative Equity Report. According to the company’s stats, negative equity declined to 19.4 percent nationally as of the end of last quarter, bringing the underwater rate down more than 8 percentage points over the course of 2013.

Yes, affordability (as measured by the National Association of Realtors' Housing Affordability Index) is down as much as 22 percent from its January 2013 peak, but is still far higher than it was in the early 2000s, says CoreLogic chief economist Mark Fleming in the company's February MarketPulse report. Moreover, Fleming notes the problem of "unaffordable housing" is one that only really exists for first-time homebuyers.

While last year's rising home prices brought relief to many underwater homeowners, allowing many older homeowners with increased net worth to purchase new homes, they also precluded many young first-time buyers from purchasing, according to a report from BBVA Group. ""Older homeowners are increasingly able to purchase a new residence with cash only after they sell their current home,"" said Jason Frederick, an economist for BBVA Compass.

While the housing market is still far from normal, it is inching that way, according to a report released Thursday from Zillow. Last year's skyrocketing home price appreciation, frenzied demand from investors, and high tide of negative equity are all expected to subside somewhat this year, according to the real estate company. In fact, some of the markets that posted the highest price gains in 2013 are already slowing, a welcome sign for those that were at risk of crossing into "bubble territory."

Loans originated last year are the best-performing mortgage loans on record, according to the November Mortgage Monitor released Tuesday by Black Knight Financial Services (formerly Lender Processing Services). The Monitor also found a significant increase in non-agency loans, a sign that the market might be ready for more risk. Non-agency, first-lien, prime, jumbo loans have increased 75 percent over the year in November, according to Black Knight.

According to RealtyTrac's latest data, approximately 9.3 million residential properties in December had a combined loan amount at least 25 percent higher than their market value. The figure represents about 19 percent of all properties with a mortgage. That number was down from 10.7 million deeply underwater homes (about 23 percent of all properties) in September and 10.9 million (26 percent) at the beginning of 2013. Meanwhile, the number of "equity-rich properties" grew to 9.1 million.

The forecast for 2014 includes a few bright spots, a couple of looming clouds, and some normalcy expected to precipitate the market, Realtor.com says in its outlook for the new year. Among the bright spots are the rising tide of positive equity and abating foreclosures. While 2.5 million homeowners rose from underwater during the year's second half, 7.1 million homeowners remain below water. However, "[t]he good news is that prices are expected to continue rising in 2014, which will lift more homeowners into positive territory."

Nearly 800,000 homes returned to a state of positive equity during the third quarter--leaving about 6.4 million underwater, according to the latest data from CoreLogic. The numbers indicate a little more complexity in the market, however. Of the 42.6 million residential properties in positive equity, CoreLogic estimates 10 million have less than 20 percent equity, and more than 1.5 million are at less than 5 percent equity. These "under-equitied" borrowers are at risk of falling back under should prices fall.