The amount of equity in mortgaged real estate increased by $489 billion in the fourth quarter of 2019 from the fourth quarter of 2018, an annual increase of 5.4%, according to the latest CoreLogic Equity Report. Borrower equity hit a new high in the fourth quarter of 2019, and borrowers have gained over $6 trillion in equity since the end of 2011 when equity stopped declining. Years of home price increases have led to record-levels of home equity and pick up in price gains in the fourth quarter of 2019 boosted home-equity wealth further.
The nationwide negative equity share for the fourth quarter of 2019 was 3.5% of all homes with a mortgage, the lowest share of homes with negative equity since CoreLogic started tracking it in the third quarter of 2009. The number of underwater properties decreased by 330,000 from the fourth quarter of 2018 to the fourth quarter of 2019.
Figure 1 shows the ten states with the largest negative equity share in the fourth quarter of 2019. Louisiana stands apart with 9.8% of mortgages with negative equity – more than twice the national average. Connecticut (7.1%) and Illinois (7%) rounded out the top three states with the highest negative equity shares. States with high negative equity shares have experienced low home price appreciation. While Florida makes the top ten list for negative equity share, that state saw a large year-over-year decline in negative equity share, falling from 6.2% in the fourth quarter of 2018 to 4.8% in the fourth quarter of 2019.
Figure 2 shows the average dollar amount of negative equity and the negative equity share for 10 large metropolitan areas in the fourth quarter of 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 8.5%, which is more than double the national rate.
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