Only Texas has a lower percentage of its home buyers “underwater” with their home mortgages than Utah. Just 1.56 percent of local homeowners owe more on their homes than they are worth, according to the second quarter Home Equity Analysis released recently by property information and analysis firm CoreLogic. Only Texas, with a negative equity rate of 1.52 percent, does better.
Homeowners in the Salt Lake City market do even better than the statewide average with a 1.2 percent negative equity rate, CoreLogic said. In the Salt Lake City market, 2,716 residential properties with a mortgage were in negative equity in the second quarter, compared to 4,337, or 2.0 percent, at the same time last year. An additional 981 properties, or 0.4 percent, were in near-negative equity (less than 5 percent equity), down from 1,631 or 0.7 percent, last year.
{mprestriction ids="1,3"}Nationwide, the percentage of homeowners owing more than their homes are worth sits at 5.44 percent. Nevada leads the nation with 10.62 percent of its loans in the red. Florida at 10.03 percent, Illinois (9.55 percent), New Jersey (8.84 percent) and Connecticut (8.64 percent) round out the Top 5. CoreLogic reported that underwater mortgages have decreased 22 percent since the second quarter of 2016.
Negative equity, also referred to as being “upside down,” applies to borrowers who could not pay off their mortgages if they were to sell their homes at market value. Negative equity can occur because of a decline in home value, an increase in mortgage debt or both. Negative equity peaked at 26 percent of mortgaged residential properties in the fourth quarter of 2009, based on CoreLogic equity data analysis.
But in general, homeowners are doing very well as equity continues to build in every state but Alaska. American homeowners saw a $12,987 average increase in the equity in their home from second quarter 2016 to second quarter 2017. Utahns did much better with a $27,124 jump in their equity, according to CoreLogic data.
About 63 percent of U.S. homeowners have mortgages on their home and they have seen their equity increase by a total of 10.6 percent in the past year, representing a total gain of $766 billion. Western states led the equity increase with Washington homeowners gaining an average of approximately $40,000 in home equity and California homeowners gaining an average of approximately $30,000 in home equity.
“Over the last 12 months, approximately 750,000 borrowers achieved positive equity,” said Frank Nothaft, chief economist for CoreLogic. “This means that mortgage risk continues to decline and, given the continued strength in home prices, CoreLogic expects home equity to rise steadily over the next year.” {/mprestriction}
