Many Properties Return To Positive Equity In First Quarter Approximately 850,000 more residential properties returned to a state of positive equity during the first quarter of 2013, and the total number of mortgaged residential properties with equity currently stands at 39 million, according to numbers released today by CoreLogic. The analysis shows that 9.7 million, or 19.8 percent, of all residential properties with a mortgage were still in negative equity at the end of the first quarter of this year with a total value of $580 billion. This figure is down from 10.5 million, or 21.7 percent, of all residential properties with a mortgage at the end of the fourth quarter last year. The national aggregate value of negative equity decreased more than $50 billion to $580 billion at the end of the first quarter from $631 billion at the end of the fourth quarter of 2012. This decrease was driven in large part by an improvement in home prices. Of the 39 million residential properties with positive equity, 11.2 million have less than 20 percent equity. Borrowers with less than 20 percent equity, referred to as "under-equitied," may have a more difficult time obtaining new financing for their homes due to underwriting constraints. At the end of the first quarter, 2.1 million residential properties had less than 5 percent equity, referred to as near-negative equity. Properties that are near negative equity are at risk should home prices fall. Under-equitied mortgages accounted for 23 percent of all residential properties with a mortgage nationwide in the first quarter. The average amount of equity for all properties with a mortgage is 32.8 percent. "The impressive home price gains of 2012 and the beginning of 2013 have had a big impact on the distribution of residential home equity," Dr. Mark Fleming, chief economist for CoreLogic, said in a statement. "During the past year, 1.7 million borrowers have regained positive equity. We expect the pent-up supply that falling negative equity releases will moderate price gains in many of the fast-appreciating markets this spring." "The negative equity burden continues to recede across the country thanks largely to rising home prices," Anand Nallathambi, president and CEO of CoreLogic, said in a statement. "We are still far below peak home price levels, but tight supplies in many areas coupled with continued demand for single family homes should help us close the gap."
Posted on: Fri, 14 Jun 2013 17:00:12 +0000
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