One million U.S. borrowers regained equity in 2016, according to CoreLogic’s newly released housing report. Further, about 63 percent of all homeowners saw their equity increase last year.
Read more: More Homeowners Turn to Their Equity Again
Now, 93.8 percent of all mortgaged properties—or about 48 million homes—are in positive equity territory, according to the report.
“Average home equity rose by $13,700 for U.S. homeowners during 2016,” says Frank Nothaft, chief economist for CoreLogic. “The equity build-up has been supported by home price growth and paydown of principal. … Further, about one-fourth of all outstanding mortgages have a term of 20 years or less, which amortize more quickly than 30-year loans and contribute to faster equity accumulation.”
Texas had the highest percentage of homes with positive equity at 98.4 percent, followed by Hawaii (98.1 percent), Alaska (97.9 percent), Colorado (97.9 percent), Oregon (97.9 percent), Utah (97.9 percent), and Washington (97.9 percent)
“Home equity gains were strongest in faster-appreciating and higher-priced home markets,” says Frank Martell, president and CEO of CoreLogic. The states with the largest home-price appreciation last year, according to the CoreLogic Home Price Index, were Washington and Oregon at 10.2 percent and 10.3 percent, respectively. The average homeowner equity gain in Washington was $31,000 and $27,000 in Oregon.
“This is double the pace for the U.S. as a whole,” Martell says. “And while statewide home-price appreciation was slower in California at 5.8 percent, the high price of housing there led to California homeowners gaining an average of $26,000 in home equity wealth last year.”
On the other hand, as of the fourth quarter of 2016, the number of residential properties with a mortgage that stood in negative equity was 3.17 million, or 6.2 percent of all homes with a mortgage. That marks a 25 percent decrease year-over-year, when it stood at 4.23 million homes in the fourth quarter of 2015.
Still, Nevada had the highest percentage of homes with negative equity at 13.6 percent, followed by Florida (11.6 percent), Illinois (11.1 percent), Rhode Island (10 percent), and Arizona (9.8 percent). CoreLogic’s report notes that those five states alone accounted for nearly 30 percent of negative equity in the U.S.