IRVINE, Calif.—Homeowners continue to see increasing equity in their homes.
CoreLogic’s newly released Q2 2017 home equity analysis shows U.S. homeowners with mortgages (roughly 63% of all homeowners) have seen their equity increase by a total of 10.6% year over year, representing a gain of $766 billion since Q2 2016.
Additionally, homeowners gained an average of $12,987 in equity between Q2 2016 and Q2 2017, CoreLogic said.
Western states led the equity increase with Washington homeowners gaining an average of approximately $40,000 in home equity and California homeowners gaining an average of approximately $30,000 in home equity. Home price increases in these states drove the equity gains.
From Q1 2017 to Q2 2017, the total number of mortgaged residential properties with negative equity decreased 10% to 2.8 million homes, or 5.4% of all mortgaged properties. Year over year, negative equity decreased 21.9% from 3.6 million homes, or 7.1% of all mortgaged properties, from Q2 2016 to Q2 2017.
“Over the last 12 months, approximately 750,000 borrowers achieved positive equity,” said Dr. Frank Nothaft, chief economist for CoreLogic, in a statement. “This means that mortgage risk continues to decline and, given the continued strength in home prices, CoreLogic expects home equity to rise steadily over the next year.”
Negative equity, often referred to as being “underwater” or “upside down,” applies to borrowers who owe more on their mortgages than their homes are worth.
Negative equity peaked at 26% of mortgaged residential properties in Q4 2009 based on CoreLogic equity data analysis, which began in Q3 2009.
The national aggregate value of negative equity was approximately $284.4 billion at the end of Q2 2017. This is up quarter over quarter by approximately $200 million, or 0.1%, from $284.2 billion in Q1 2017 and down year over year by approximately $700 million, or 0.2%, from $285.1 billion in Q2 2016.
“Homeowner equity reached $8 trillion in the second quarter of 2017, which is more than double the level just five years ago,” said Frank Martell, president and CEO of CoreLogic, in a statement. “The rapid rise in homeowner equity not only reduces mortgage risk, but also supports consumer spending and economic growth.”