15 Aug

Home Equity Gains are Rising in the West

first_img CoreLogic Home Equity 2016-12-08 MirashaBrown The substantial and ongoing rise in aggregate home equity across the country over the last seven years is creating more wealth for homeowners—and the West Coast is leading the way in equity gains.Homeowners in the United States saw their equity increase by an aggregate total of $227 billion in Q3 2016, which is a 3.1 increase from Q2 2016, according to CoreLogic’s Q3 2016 Negative Equity Report. Home equity has grown by $726 billion since last year, which is a 10.8 percent increase in Q3 compared to Q3 2015.The number of underwater mortgaged homes, or those with with negative equity, was at 3.2 million (6.3 percent) in Q3 2016, which is a decrease of 10.7 percent quarter-over-quarter from 3.6 million homes (7.1 percent) in Q2 2016. The share of borrowers with negative equity is way down from its Q4 2009 peak of 26 percent, according to CoreLogic.Dr. Frank Nothaft, Chief Economist for CoreLogic, acknowledged a trend in West Coast states that obtaining positive equity. “Home equity rose by $12,500 for the average homeowner over the last four quarters,” he said. “There was wide geographic variation with homeowners in California, Oregon and Washington gaining an average of at least $25,000 in home equity wealth, while owners in Alaska, North Dakota and Connecticut had small declines, on average.”Texas had  the highest percentage of homes with positive equity (98.4 percent), followed by Alaska (98.1 percent), Colorado (97.9 percent), Utah (97.9 percent), and Washington (97.9 percent), according to CoreLogic. Nevada accounted for 14.2 percent of mortgaged properties in negative equity. Florida (12.5 percent), Illinois (10.6 percent), Arizona (10.6 percent), and Rhode Island (10 percent) rounded out the top five states that made up 30.6 percent of negative equity mortgages in the nation.Anand Nallathambi, President and CEO of CoreLogic, attributed the equity gains to the rise in home prices. “Price appreciation is the main ingredient for home equity wealth creation, and home prices rose 5.8 percent in the year ending September 2016 according to the CoreLogic Home Price Index,” he said. “Pay down of principal is the second key component of equity building. Many homeowners have refinanced into shorter-term loans, such as a 15-year loan, and by doing so, they have significantly fewer mortgage payments and are able to build equity wealth faster.”Three out of the five metros with the highest share of homes with positive equity were located in the West. San Francisco was first at 99.4 percent, followed by Houston (98.5 percent), Denver (98.4 percent), Los Angeles (96.9 percent), and Boston (95.3 percent).The metro area with the highest percentage of mortgaged properties in negative equity in Q3 was Miami at 17 percent, followed by Las Vegas (16.2 percent), Chicago (12.2 percent), Washington, D.C. (8.7 percent), and New York City (5.1 percent).Click here to view the complete report. December 8, 2016 484 Views Home Equity Gains are Rising in the Westcenter_img Share in Daily Dose, Data, Featured, Newslast_img

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