Homeowners throughout the U.S saw their equity increase by nearly 12 percent in 2016 – and more than 1 million borrowers moved out of negative equity, according to an analysis by CoreLogic.
In total, 93.8 percent of all mortgaged properties, or approximately 48 million homes, have a positive equity.
“Average home equity rose by $13,700 for U.S. homeowners during 2016,” CoreLogic Chief Economist Frank Nothaft said in a press release. “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.”
According to CoreLogic, the total number of mortgaged residential properties with negative equity during the fourth quarter of 2016 stood at 3.17 million, or 6.2 percent of all homes with a mortgage. That’s a 25 percent year-over-year decrease compared with the fourth quarter of 2015.
“Home equity gains were strongest in faster-appreciating and higher-priced home markets,” CoreLogic President and CEO Frank Martell said. “The states with the largest home-price appreciation last year were Washington and Oregon at 10.2 percent and 10.3 percent, respectively, with average homeowner equity gains of $31,000 and $27,000, respectively.
“This is double the pace for the U.S. as a whole. 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,” Martell added.