New data released by Santa Ana, Calif.-based CoreLogic has found that 22.3% of residential properties with a mortgage – 10.8 million housing units – were in negative equity at the end of the second quarter of this year. This is down from 11.4 million properties, or 23.7%, at the end of the first quarter of the year.
CoreLogic reports that an additional 2.3 million borrowers possessed near-negative equity – less than 5% equity – in their homes at the end of the second quarter. Approximately 600,000 borrowers reached a state of positive equity at the end of the second quarter, adding to the more than 700,000 borrowers that moved into positive equity in the first quarter.
Together, negative and near-negative equity mortgages accounted for 27% of all residential properties with a mortgage nationwide in the second quarter, down from 28.5% at the end of the first quarter. Nationally, negative equity decreased from $691 billion at the end of the first quarter to $689 billion at the end of the second quarter – CoreLogic attributes the decrease to an improvement in house price levels.
Nevada had the highest percentage of mortgaged properties in negative equity, at 59%, followed by Florida (43%), Arizona (40%), Georgia (36%) and Michigan (33%). These top five states combined account for 34.1% of the total amount of negative equity in the U.S.
‘Nearly 2 million more borrowers in negative equity would be above water if house prices nationally increased by 5 percent,’ says Anand Nallathambi, president and CEO of CoreLogic. ‘We currently expect home prices to continue to trend up in August. Were this trend to be sustainedÂ we could see significant reductions in the number of borrowers in negative equity by next year.’