About 273,000 homes returned to positive equity in the third quarter of 2014, bringing the total to 44.6 million of all properties with a mortgage, according to a newly released equity report from CoreLogic.
That number represents around 90 percent of all mortgaged properties nationwide.
Overall, about 5.1 million homes-or 10.3 percent of all residential properties with a mortgage-were still in negative equity territory in the third quarter. That is a slight drop from 5.4 million in the second quarter, but down 3 percentage points year-over-year when the total stood at 6.5 million in the third quarter of 2013.
If home prices rose by 5 percent more-which is largely predicted to happen this year-an additional one million homeowners now in negative equity would also move into positive territory, CoreLogic reported.
“Negative equity continued to decrease in the third quarter as did the level of homes mired in the foreclosure process,” said Anand Nallathambi, president and CEO of CoreLogic. “This should hopefully translate into less friction in the housing market as we move forward. Better fundamentals supporting home ownership in the face of higher rents should attract more first-time home buyers to the market this year and next.”
The largest declines in the negative equity share of homeowners occurred in Nevada, Georgia, Michigan, and Florida.
Some homeowners holding equity are still considered “under-equitied.” About 9.4 million-or 19 percent-of properties with positive equity have less than 20 percent of equity, and 1.3 million have less than 5 percent of equity in their homes.
By Tom Kelly, Real Estate Today