CoreLogic: 2.5 million homes float back into positive territory
Improving home prices fuel momentum
Approximately 2.5 million more residential properties returned to a state of positive equity during the second quarter of 2013, according to the CoreLogic second- quarter home equity report.
The total number of mortgaged residential properties with positive equity stands at 41.5 million, the research firm found.
"Equity rebuilding continued in the second quarter of this year as the share of underwater mortgaged homes fell to 14.5%," said CoreLogic Chief Economist Mark Fleming.
He added, "In just the first half of 2013 almost three and a half million homeowners have returned to positive equity, but the pace of improvement will likely slow as price appreciation moderates in the second half."
Despite the substantial decline in negative equity, there’s more ground left to cover with the remaining 7.1 million underwater borrowers.
Meanwhile, 7.1 million, or 14.5%, of all residential properties with a mortgage were still in negative equity at the end of the second quarter of 2013 with a total value of $428 billion, down from $576 billion at the end of the first quarter.
This figure is drastically down as a result of a steady home price improvements.
Of the residential properties with positive equity, 10.3 million have less than 20% equity, meaning these borrowers may have a more difficult time obtaining new financing for their homes due to underwriting constraints, according to the report.
At the end of the second quarter, 1.7 million residential properties had less than 5% equity.
Looking at individual states, Nevada had the highest percentage of mortgaged properties in negative equity at 36.4%, with Florida and Arizona following behind with 31.5% and 24.7%, respectively.
Of the largest 25 metropolitan areas, Miami-Miami Beach-Kendall, Fla., held the highest percentage of mortgaged properties in negative equity at 36.5%, with Tampa-St. Petersburg-Clearwater, Fla., and Phoenix-Mesa-Glendale, Ariz., following behind with 33.8% and 25.6%, respectively.
The bulk of home equity for mortgaged properties is concentrated at the higher end of the housing market.
For instance, 91% of homes valued at greater than $200,000 have equity, compared with 80% of homes valued at less than $200,000, CoreLogic noted.
"Price appreciation obviously had a positive impact on home equity over the first half of 2013, especially the second quarter," concluded president and CEO of CoreLogic Anand Nallathambi.