Home equity is still on the rise, with homeowners gaining an average of $16,200 apiece in the second quarter, the latest data shows.
CoreLogic’s Home Equity Insights for Q2 2018 shows an equity jump of 12.3% — about $980.9 billion — on all mortgaged residences since the same period last year.
Equity grew in nearly every state, with California, Washington, and Nevada seeing the biggest gains. California homeowners pulled in an average of $48,832 over last quarter, and Washington residents saw their equity grow by an average of $41,138, the property analytics firm concluded.
“When aggregated across all homeowners, that totals almost $1 trillion in gains in home equity wealth,” CoreLogic chief economist Frank Nothaft said in a statement. “This wealth gain will support additional consumption spending and home improvement expenditures in coming years.”
And as equity continues to rise, negative equity has decreased 20.1% since the same period in 2017. Negative equity occurs when borrowers owe more on their mortgage than the home is worth — also known as an “underwater” loan — and it has decreased the most in areas with “strong price appreciation,” CoreLogic’s president and CEO Frank Martell said in a statement.
“Further, the relatively low level of shadow inventory contributes to the chronic shortage of housing supply and price increase in many markets,” Martell said.
Shadow inventory is typically defined as “the number of homes with mortgages that are 90 or more days delinquent and that we believe will move into foreclosure to ultimately become real-estate owned properties in the for-sale inventory,” a spokesperson for CoreLogic told RMD.
The data shows only 4.3% of residences — about 2.2 million nationwide — currently have negative equity. The numbers were at their highest in 2009, when 26% of mortgaged residential properties were underwater.
The Miami metropolitan area, at 11.4%, and the Chicago metro area, at 8.7%, led the nation in negative equity for the second quarter of 2018.
Written by Maggie Callahan