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Negative Equity Share Falls to 8 Percent in First Quarter 2016

Decreases Seen Across the Country

Molly Boesel    |    Property Valuation

  • The negative equity share fell to 8 percent in Q1 2016 from 10.3 percent in Q1 2015.
  • Only North Dakota saw an increase in negative equity share over the past year, but the increase was minimal.
  • Negative equity remains low in the oil-patch areas.

The nationwide negative equity share decreased in Q1 2016, falling from 10.3 percent in Q1 2015 to 8 percent in Q1 2016. The number of underwater loans (or those in negative equity) fell by about 1.1 million loans, from 5.1 million in Q1 2015 to 4 million in Q1 2016, according to the latest CoreLogic Equity Report. The total dollar amount of negative equity, which applies to borrowers who owe more on their mortgages than their homes are worth, fell to $299 billion in Q1 2016, down by $40.2 billion from Q1 2015.

Avg Amount

Avg Amount

Year over year, only North Dakota registered an increase in the negative equity share in Q1 2016, but the increase was minimal (0.2 percentage points). Figure 1 illustrates the 25 states with the largest percentage-point change in the negative equity share from the previous year. Florida’s 6.1-percentage-point decrease between Q1 2015 and Q1 2016 represented the largest decline.

Figure 2 shows the average dollar amount of negative equity and the negative equity share for 10 large Core Based Statistical Areas (CBSAs) in Q1 2016. The average amount of negative equity is inversely related to the negative equity share. For example, in this group of CBSAs, Boston has the largest average amount of negative equity, but the negative equity share is only 5.7 percent, and Phoenix and Atlanta have the smallest average amount of negative equity, but both have negative equity shares above the national average.

Negative Equity

Negative Equity

Figure 3 shows the negative equity and under-equity (less than 20 percent equity) shares in select oil-patch areas for Q1 2015 and Q1 2016. Negative equity remains low in these areas, with the Texas metropolitan areas all having negative equity shares under 2 percent and lower than a year earlier. The under-equity share was highest in Oklahoma, and the under-equity share rose year over year in North Dakota and the Midland and Odessa metro areas in Texas.

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