U.S. ‘Underwater’ Homeowners Regain Equity as Prices RisePrashant Gopal
About 200,000 U.S. homeowners regained positive equity in their properties in the fourth quarter as prices rebounded from a more than five-year slump, according to CoreLogic Inc.
At the end of last year, 10.4 million homes, or 21.5 percent of all residential properties with a mortgage, were underwater, with owners owing more than the property was worth, the real estate data firm said in a statement today. That was down from 10.6 million homes, or 22 percent, at the end of the third quarter.
The U.S. housing market is rebounding as borrowing costs hover near record lows and employment improves, helping to fuel demand for a shrinking supply of property listings. Home prices jumped 9.7 percent in the 12 months through January, the biggest gain since April 2006, according to Irvine, California-based CoreLogic. About 1.7 million homeowners returned to positive equity in 2012, the company said today.
“The scourge of negative equity continues to recede across the country,” Anand Nallathambi, CoreLogic’s president and chief executive officer, said in a statement. “The trend toward more homeowners moving back into positive-equity territory should continue in 2013.”
The aggregate value of negative equity in the U.S. decreased to $628 billion from $670 billion at the end of the third quarter.
Nevada had the highest percentage of mortgaged properties in negative equity, at 52.4 percent, followed by Florida at 40.2 percent, Arizona with 34.9 percent, Georgia with 33.8 percent and Michigan with 31.9 percent.
The majority of home equity is concentrated at the high end of the housing market. For mortgaged homes valued at more than $200,000, 86 percent are above water, compared with 72 percent for properties worth less.
A 5 percent gain in prices would return another 1.8 million homes, or 3.7 percent of all residential properties with a mortgage, to positive equity, CoreLogic said.