While the U.S. housing market hasn’t completed its rebound, most home values have been rising steadily. That’s certainly good news for homeowners!
CoreLogic, a leading provider of consume, financial and property information, analytics and services to business and government reports that 91.5% of all mortgaged properties in the U.S. are equity-positive.
Across the nation, borrower equity soared year over year by $680 billion (11.5 percent) in the 4th quarter of last year—the 13th consecutive quarter of double-digit growth. And the number of homeowners with home equity above 20 percent is also rising rapidly.
At the same time, home mortgage debt owed increased $90.0 billion to a total of $9.49 trillion in the fourth quarter of 2015. Because the value of the real estate grew faster than the amount of mortgage debt, home equity held by individual households grew rather than declined. Some of the other factors thought to be contributing to higher home equity levels include population growth, tight supply, and household formation as more millennials enter the housing market, plus historically low-interest rates.
Nationwide, home prices, including distressed sales, increased year over year by 6.9 percent in January 2016 compared with January 2015. The CoreLogic HPI”. (Home Price Index) Forecast predicts 2016 home prices will increase by more than five percent, year over year, into 2017—more good news!
The majority of positive equity for mortgaged residential properties is found in the higher-end of the housing market. For example, 95 percent of homes valued at $200,000 or higher have positive equity compared with homes valued at less than $200,000, where only 87 percent have positive equity.
Certain parts of the country are experiencing higher than average rises in equity. Texas ranks first in the highest percentage of mortgaged residential properties in positive equity at 98 percent, followed by Alaska and Hawaii at 97.6 percent, Montana at 97.3 percent and Colorado at 97.1 percent.
However, there are still sections of the country that have yet to recover fully from the housing downturn. The Miami-Miami Beach-Kendall, FL area is reported to have the highest percentage of properties in negative equity at 22 percent, followed by Las Vegas-Henderson-Paradise, NV at 21.3 percent, Chicago-Naperville-Arlington Heights, IL at 16.7 percent, Washington-Arlington-Alexandria, DC-VA-MD-WV at 11 percent and Boston, MA at 6.3 percent.
A full recovery for all areas is anticipated, but it will take some time. Home prices continue to rise across the country with every state posting year-over-year gains during the last 12 months. Improved economic conditions, employment gains, and tight inventories continue to fuel remarkably strong improvements in many markets, especially for homes priced below $500,000.
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