Borrower Equity Update: Fourth Quarter 2017

Homeowner Equity Increased by $908 Billion in 2017

By Molly Boesel Real Estate, Risk Management

  • National share of homes with negative equity ended 2017 at 4.9 percent.
  • 675,000 borrowers moved into positive equity in 2017.
  • Nevada saw the largest improvement in the negative equity share over the past year, falling 5.5 percentage points.

The amount of equity in mortgaged real estate increased by $908 billion in 2017, an annual increase of 12.2 percent, according to the latest CoreLogic Equity Report. Homeowner equity has more than doubled in five years, increasing by $4.5 trillion from Q4 2012 to Q4 2017[1]. The nationwide negative equity share for Q4 2017 was 4.9 percent of all homes with a mortgage, more than 20 percentage points lower than the peak negative equity share – 26 percent – recorded in Q4 2009.[2]  Over the past 12 months, 675,000 borrowers moved into positive equity.

The improvement in negative equity has been experienced across the country, with all but three states registering a year-over-year decrease in Q4 2017 (Oklahoma saw a 0.1 percentage point increase, Louisiana a 0.2 percentage point increase, and New York a 0.8 percentage point increases). Figure 1 shows the 25 states with the largest percentage-point decreases in the negative equity share from the previous year. Nevada’s 5.5-percentage-point decrease between Q4 2016 and Q4 2017 represented the nation’s largest year-over-year decline, and the drop from a high of 72.7 percent in Q1 2010 to 8 percent in Q4 2017 represented the largest decline from the peak.

Figure 2 shows the average dollar amount of negative equity and the negative equity share for 10 large Core Based Statistical Areas (CBSAs) in Q4 2017. The average amount of negative equity is inversely related to the negative equity share. For example, in this group of CBSAs, San Francisco has the largest average amount of negative equity, but the negative equity share is only 0.6 percent. Miami has the smallest average amount of negative equity, but has a negative equity share that is nearly three times the national average.

[1] Homeowner equity in this report reflects only mortgaged single-family real estate.

[2] CoreLogic began reporting negative equity in Q3 2009.

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