About 3.2 million homes, or 6.3 percent of all U.S. residential properties with a mortgage, were still in “negative equity” by the end of the third quarter of 2016, according to the latest analysis by CoreLogic.
The number of mortgaged residential properties with some equity is now at 47.9 million.
Negative equity refers to borrowers who owe more on a home than it is worth. These properties are also referred to as “underwater” or “upside down.”
“Home equity rose by $12,500 for the average homeowner over the last four quarters,” says Dr. Frank Nothaft, chief economist for CoreLogic. “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.”
Since the depths of the Great Recession, triggered in large part by a housing market meltdown and foreclosure crisis, rising home prices have bolstered a long but steady recovery into positive home equities.
An additional 600,000 properties would regain equity if home prices rose another 5 percent.
Of the more than 51 million homes with a mortgage, 7.5 million, or 14.6 percent, of properties have positive equity. However, these properties are considered “under-equitied” because they have less than 20 percent equity.