Borrowers Are Sitting On Record Amounts of Home Equity

Borrower Equity Update: First Quarter 2019

By Molly Boesel Real Estate, Risk Management

  • National share of homes with negative equity for Q1 2019 was 4.1%.
  • The number of mortgaged properties in negative equity fell by 268,000 from Q1 2018 to Q1 2019.
  • Nevada saw the largest decline in the negative equity share over the past year, falling 2.6 percentage points.

The amount of equity in mortgaged real estate increased by about $486 billion in Q1 2019 from Q1 2018, an annual increase of 5.6%, according to the latest CoreLogic Equity Report. The first quarter’s annual increase in home equity marked the lowest such gain in equity since Q4 2012, which reflects slowing price growth. Despite the lower growth rate, borrower equity hit a new high in Q1 2019, and borrowers have gained $5.6 trillion in equity since the end of 2011 when equity stopped declining.

The nationwide negative equity share for Q1 2019 was 4.1% of all homes with a mortgage, more than 20 percentage points lower than the peak negative equity share – 26% – recorded in Q4 2009.[1]  The number of underwater properties decreased by 268,000 from Q1 2018 to Q1 2019.

25 States with the Largest Year over Year Decreases

Figure 1 shows the 25 states with the largest percentage-point decreases in the negative equity share from the previous year. Nevada’s 2.6-percentage-point decrease in negative equity between Q1 2018 and Q1 2019 represented the nation’s largest year-over-year decline, and the drop from a high of 72.7% in Q1 2010 to 4.2% in Q1 2019 represented the largest decline from the peak.

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 Q1 2019. 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 0.7%. Miami has the smallest average amount of negative equity, but has a negative equity share of 10%, which is more than double the national rate.

[1] CoreLogic began reporting negative equity in Q4 2009.

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