Homeowner equity jumped again in the fourth quarter of last year. CoreLogic’s report said it found that, among homeowners with mortgages, about 63 percent of the total, an additional 5.4 percent accrued to their home equity, translating into an increase of about $7,300 in household wealth. The largest increase was in Idaho at $18,700.
The nation’s aggregate increase in equity from the 4th quarter of 2018 through the 4th quarter of 2019 was $489.4 billion. This does not include growth in equity among those homeowners without a mortgage.
CoreLogic’s Chief Economist Frank Nothaft said, “The CoreLogic Home Price Index recorded a quickening of home price gains during the fourth quarter of 2019, helping to boost home equity wealth. The average family with a mortgage had a $7,300 gain in home equity during the past year, and a total of $177,000 in home equity wealth.”
The rate of negative equity continues to fall. The total number of mortgaged residential properties that were underwater, that is with a larger mortgage balance than the value of the home, decreased by 4.8 percent quarter over quarter and by 15 percent on an annual basis. There are now approximately 1.9 million underwater properties, 3.5 percent of the total with a mortgage.
The national total of negative equity dropped by $19.6 billion from the third quarter to $283 billion. This is a 6.6 percent decline.
The fourth quarter results are a far cry from the situation during the housing crisis. In the fourth quarter of 2009 an estimated 26 percent of mortgaged residential properties were in a negative equity situation.
“The number of underwater homes in the United States has fallen to the lowest level since the Great Recession,” according to CoreLogic President and CEO Frank Martell. “In general, Western states and those in the mid-Atlantic region are registering strong gains, compared to states in the Northeast and upper Midwest. With unprecedented low rates and constrained supply, the housing market should continue to do well. Viewed against the backdrop of the recent stock market volatility, steady gains in home equity are a welcome source of stability.”
Source – Mortgage News Daily