CoreLogic: 1 million borrowers regained equity last year
Number of underwater homes increases 2.9% quarterly
Approximately 1 million borrowers regained equity in 2015, boosting the total number of mortgaged residential properties with equity at the end of fourth quarter 2015 to 46.3 million, or 91.5% of all mortgaged properties, a new report from CoreLogic said.
According to the report, borrower equity increased year over year by $682 billion in Q4 2015.
However, the report added that approximately 120,000 properties lost equity in the fourth quarter of 2015 when compared to the third quarter of 2015.
While the total number of mortgaged residential properties with negative equity increased 2.9% from last quarter, to 4.3 million, or 8.5%, it’s down 19.1% annually from 5.3 million homes, or 10.7%.
Negative equity, often referred to as “underwater” or “upside down,” applies to borrowers who owe more on their mortgages than their homes are worth.
“In Q4 of last year home equity increased by $680 billion or 11.5%, the 13th consecutive quarter of double digit growth," said Frank Nothaft, chief economist for CoreLogic.
“The improvement in equity reflects positive home prices and continued deleveraging of mortgage balances by households,” added Nothaft.
In addition, for the homes in negative equity status, the national aggregate value of negative equity increased to $311 billion, up $5.5 billion (1.8%), from $305.5 billion the previous quarter.
On an annual basis, the value of negative equity fell from $348 billion for the same period a year ago, representing a decrease of 10.7% in 12 months.
“The number of homeowners with more than 20% equity is rising rapidly,” said Anand Nallathambi, president and CEO of CoreLogic.
“Higher prices driven largely by tight supply are certainly a big reason for the rise, but continued population growth, household formation and ultralow interest rates are also factors. Looking ahead in 2016, we expect home equity levels to continue to build, which is a good thing for the long-term health of the U.S. economy,” added Nallathambi.