Homeowner Equity Increased by About $1 Trillion Year Over Year

Borrower Equity Update: Second Quarter 2018

By Molly Boesel Real Estate, Risk Management

  • National share of homes with negative equity for Q2 2018 was 4.3 percent.
  • 570,000 borrowers moved into positive equity from Q2 2017 to Q2 2018.
  • Nevada saw the largest improvement in the negative equity share over the past year, falling 4.9 percentage points.

The amount of equity in mortgaged real estate increased by about $1 trillion in Q2 2018 from Q2 2017, an annual increase of 12.3 percent, according to the latest CoreLogic Equity Report. Homeowner equity has nearly doubled in five years, increasing by $3.9 trillion from Q2 2013 to Q2 2018[1]. The nationwide negative equity share for Q2 2018 was 4.3 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, 570,000 borrowers moved into positive equity.

25 States with the Largest Year Over Year Decreases in Negative Equity

Only two states registered a year-over-year increase in negative equity in Q2 2018:  Iowa and North Dakota, which both logged a 0.1 percentage-point increase). Figure 1 shows the 25 states with the largest percentage-point decreases in the negative equity share from the previous year. Nevada’s 4.9-percentage-point decrease in negative equity between Q2 2017 and Q2 2018 represented the nation’s largest year-over-year decline, and the drop from a high of 72.7 percent in Q1 2010 to 5.7 percent in Q2 2018 represented the largest decline from the peak.

Average Amount of Negative Equity by CBSA

Figure 2 shows the average dollar amount of negative equity and the negative equity share for 10 large Core Based Statistical Areas (CBSAs) in Q2 2018. 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 0.5 percent. Miami has the smallest average amount of negative equity, but has a negative equity share of 11.4 percent, which is nearly three times the national rate.

[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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