U.S. homeowners have seen their equity increase by about 11%, or $766.4 billion, in the first quarter from the same period a year ago, according to an analysis by property information provider CoreLogic Thursday, as the housing market continued to recover from the housing crisis of a decade ago.
CoreLogic also said in its report that the average homeowner gained about $13,400 in equity over the same period.
During the first quarter, the total of mortgaged residential properties with negative equity decreased 24% from 4.1 million homes, or 8.1% of all mortgaged properties.
“One million borrowers achieved positive equity over the last year, which means mortgage risk continues to steadily decline as a result of increasing home prices,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Pockets of concern remain with markets such as Miami, Las Vegas and Chicago, which are the top three for negative equity among large metros, with each recording a negative equity share at least twice or more the national average.”
Negative equity, often referred to as being “underwater” or “upside down,” is a term used for borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in home value, an increase in mortgage debt or both.
Negative equity peaked at 26% of mortgaged residential properties in the fourth quarter of 2009, based on CoreLogic equity data analysis.
Frank Martell, chief executive officer of CoreLogic, said the homeowner equity increase was the largest since mid-2014. “The rising cushion of home equity is one of the main drivers of improved mortgage performance. It also supports consumer balance sheets, spending and the broader economy,” he said.
Texas was the national leader in increase in homeowner equity, surging 98.4%. Utah, Washington, Hawaii and Colorado were next.
Washington had the highest year-over-year increase in homeowner equity at $37,900.
Nevada had the highest percentage of homes with negative equity of 12.4%. Other states with high negative equity were Florida, Illinois, New Jersey and Connecticut.
Of the 10 largest metropolitan areas by population, San Francisco-Redwood City-South San Francisco, California, had the highest percentage of mortgaged properties in a positive equity position at 99.4%, followed by Denver-Aurora-Lakewood, Colorado; Houston-The Woodlands-Sugar Land, Texas; Los Angeles-Long Beach-Glendale, California; and Boston, Massachusetts.
Miami-Miami Beach-Kendall, Florida, had the highest percentage of mortgaged properties in negative equity of the largest metro area at 15.7%, followed by Las Vegas-Henderson-Paradise, Nevada; Chicago-Naperville-Arlington Heights, Illinois; Washington-Arlington-Alexandria, Virginia; and New York-Jersey City-White Plains.