Lending

1 million borrowers regained equity last year

NEW YORK – March 14, 2016 – The nation increased its number of financially secure households by a significant amount in 2015, according to CoreLogic's recent analysis. By the end of the fourth quarter, about 46.3 million – 91.5 percent –properties with a mortgage had equity.

Highest equity by state

The following states had the highest percentage of properties with a mortgage in positive equity territory:

Texas: 98%
Alaska: 97.6%
Hawaii: 97.6%
Montana: 97.3%
Colorado: 97.1%

Highest equity by city

At the metro level, the following areas had the highest percentage of properties with positive equity:

San Francisco-Redwood City-South San Francisco, Calif.: 99.3%
Houston-The Woodlands-Sugar Land, Texas: 98.1%
Denver-Aurora-Lakewood, Colo.: 98%
Los Angeles-Long Beach-Glendale, Calif.: 95.5%
New York-Jersey City-White Plains, N.Y.-N.J.: 93.8%

"The number of homeowners with more than 20 percent equity is rising rapidly," says 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 ultra-low interest rates are also factors."

Nallathambi predicts more improvements 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," he says.

The majority of residential properties with positive equity are at the higher end of the housing market, according to CoreLogic. Ninety-five percent of homes valued at $200,000 or higher have equity, compared to 87 percent of homes below the $200,000 mark.

Despite recent gains, however, many homeowners are still "under-equitied," according to CoreLogic. More than 50 million residential properties with a mortgage – 18.9 percent – have less than 20 percent equity in their properties, and 1.2 million homeowners – 2.3 percent – have less than 5 percent equity.

In addition, some homeowners still don't have equity. About 4.3 million homeowners with a mortgage – around 8.5 percent – still owe more on their home than it is currently worth, as of the fourth quarter of 2015. That marks a slight increase from 8.3 percent in the prior quarter, but a 19 percent year-over-year decrease from 2014.

Source: CoreLogic