Home equity continues to increase

Given the continued appreciation of home prices, it’s no surprise that CoreLogic’s Home Equity Report states that U.S. homeowners with a mortgage saw an increase in equity of 8.1 percent year over year. The average homeowner saw home equity gains of approximately $9,000 between the fourth quarter of 2017 and the fourth quarter of 2018.

The number of homes with negative equity, where the loan balance is higher than the home’s current worth sits at 2.2 million or 4.2 percent of all mortgaged properties.

Given that home prices are predicted to rise 4.5 percent over the next year, this number should be reduced by 350,000.

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U.S. Homeowners Equity Continues to Increase

One of the positives of the continued home price appreciation is the amount of equity that homeowners can borrow against has increased significantly, especially in California. Currently 40 million homeowners in the U.S. have at least 20 percent equity in their homes.

40 percent of the nation’s tappable home equity is in California.

three of the top five of metro areas in the U.S. with the most home equity are in California including San Francisco, San Jose, and Los Angeles.

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More Homes Have Positive Equity

A recent report by CoreLogic states that nation-wide 47.9 million home – or 93.7 percent of those having a mortgage – now have positive equity.

Moreover, 95.2 of California homeowners have positive equity and San Francisco leads the nation with 99.4 percent as of the third quarter, 2016.

Of course, equity gains are due in large part to continually rising home prices – certainly a constant in the Bay Area – but also to favorable mortgage rates.

The report notes that mortgage rates remain relatively low but have risen for six consecutive weeks since the presidential election as are expected to continue to raise, particularly if the Federal Reserve raises interest rates next week.

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Homeowners’ Equity Holdings Continues to Increase

The value of American homeowners’ equity holdings – market value of homes minus the home loans – increased by nearly $2.1 trillion in 2013 to nearly $10 trillion. In addition nearly 4 million homeowners were able to rise above the negative equity of their homes thanks largely to increasing prices. According to the latest research, nearly 43 million owners with mortgage debt have positive equity. however, approximatelyly 6.5 million owners are still in negative equity positions, which, however, is down dramatically from more than 10 million a year ago and 12 million in 2009.

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