91% of Properties Now Have Equity

By Robin MacDonald CDT | Sep 17, 2015
Wareham —

91% of Properties Now Have Equity

Daily Real Estate News | Wednesday, September 16, 2015

About 759,000 properties regained equity in the second quarter, bringing the total number of residential mortgages that are lower than their property's value to about 45.9 million. That equates to about 91 percent of all mortgaged properties. Borrower equity has risen year-over-year by $691 billion, according to CoreLogic’s second quarter equity report.

“For much of the country, the negative equity epidemic is lifting,” says Anand Nallathambi, CoreLogic’s CEO and president. “The biggest reason for this improvement has been the relentless rise in home prices over the past three years which reflects increasing money flows into housing and a lack of housing stock in many markets."

CoreLogic predicts home prices to rise an additional 4.7 percent over the next year, and if that prediction holds true, 800,000 home owners could regain positive equity by July 2016.

The majority of positive equity is centered on the high-end housing market. CoreLogic’s report finds that 95 percent of homes valued at more than $200,000 have equity, compared with 87 percent of homes valued at less than $200,000.

Still, the total number of mortgaged residential properties with negative equity remains elevated at 4.4 million – or 8.7 percent of all properties with a mortgage, according to CoreLogic’s report. Negative equity refers to a home owner who is “underwater,” owing more on their mortgage than their home is currently worth.

Find out the 10 places where foreclosure is still a big problem for the market.

Of the more than 50 million residential properties with a mortgage, about 9 million or 17.8 percent have less than 20 percent of equity and 1.1 million – or 2.3 percent – have less than 5 percent equity.

“Borrowers who are ‘under-equitied’ may have a more difficult time refinancing their existing homes or obtaining new financing to sell and buy another home due to underwriting constraints,” CoreLogic notes. These borrowers are also more at risk of moving to negative equity if home prices fall.

Five states alone accounted for nearly 32 percent of negative equity in the United States. The states with the highest percentage of mortgaged residential properties in negative equity are Nevada (20.6%), Florida (18.5%), Arizona (15.4%), Rhode Island (13.8%), and Illinois (13.1%). By large metro area, Tampa-St. Petersburg-Clearwater, Fla., had the highest percentage of residential properties in negative equity territory at 20.2 percent, followed by Phoenix-Mesa-Scottsdale, Ariz. (15.4%), Chicago-Naperville-Arlington Heights, Ill. (15.3%), Riverside-San Bernardino-Ontario, Calif. (12.3%), and Warren-Troy Farmington Hills, Mich. (11.8%).

On the other hand, the states with the highest percentage of mortgaged residential properties in positive equity are Texas (97.9%), Alaska (97.6%), Hawaii (97.5%), Montana (97.2%), and Colorado (96.7%). Of large metro areas, Houston-The Woodlands-Sugar Land, Texas had the highest percentage of properties with positive equity at 98.1 percent, followed by Portland-Vancouver-Hillsboro, Ore./Wash. (97.8%), Dallas-Plano-Irving, Texas (97.8%), Anaheim-Santa Ana-Irvine, Calif. (97.5%) and Denver-Aurora-Lakewood, Colo. (97.5%).

Comments (7)
Posted by: Andrea Smith | Sep 17, 2015 15:49

For those who are wondering where the above article was copied and pasted from:

 

http://realtormag.realtor.org/daily-news/2015/09/16/91-properties-now-have-equity

 

Robin - Quite an overview, although it doesn't mention Massachusetts, Southeastern Massachusetts, or more specifically Wareham. I hope in the future you'll find time to address real estate issues as they relate specifically to Wareham.



Posted by: justin beiber | Sep 17, 2015 16:17

 

Good luck getting a direct answer to your question, Andrea.

My financial adviser recently sold some shares of Kraft stock.

Kraft bought Heinz Corp. three months ago, and its stock price has risen steadily ever since. 

When I asked my broker why he sold the stock, he said Berkshire Hathaway just bought the company and that he no longer wanted the stock in my portfolio.

Go figure!



Posted by: Spherebreaker | Sep 17, 2015 18:39

Justin, I would hang on to that financial advisor. He seems to have good set of values by not being involved with someone that owns over a billion dollars in back taxes such as Warren Buffet, owner of the Berkshire Hathaway fund.



Posted by: justin beiber | Sep 18, 2015 16:23

 

Yeah, but get this.

Right after he sold Kraft, he bought 84 shares of Berkshire Hathaway stock !! 



Posted by: Spherebreaker | Sep 18, 2015 16:33

Hopefully Warren Buffet doesn't use it to pay is back taxes.



Posted by: OnsetForLife | Sep 19, 2015 06:01

What do stocks have to do with home equity??



Posted by: Whm4now | Sep 19, 2015 12:42

Opportunity to be pretensious.



If you wish to comment, please login.