With property values rising, more than 200,000 homeowners in the United States returned to positive equity in their homes in the fourth quarter of 2012, according to a new study by CoreLogic.
The number of homeowners that are still "underwater," with negative equity in their homes, now stands at 10.4 million, or 21.5 percent of all residential properties with mortgages, down from 10.6 million at the end of the third quarter, the firm says.
"The scourge of negative equity continues to recede across the country. There is certainly more to do but with fewer borrowers underwater, the fundamentals underpinning the housing market will continue to strengthen," said Anand Nallathambi, president and CEO of CoreLogic. "The trend toward more homeowners moving back into positive equity territory should continue in 2013."
About 20 percent of the homeowners with positive equity have less than 20 percent equity in their homes, which CoreLogic characterizes as "under-equitied." A total of 2.3 million had less than 5 percent.
More highlights from the report:
Nevada had the highest percentage of mortgaged properties in negative equity at 52.4 percent, followed by Florida (40.2 percent), Arizona (34.9 percent), Georgia (33.8 percent) and Michigan (31.9 percent). These top five states combined account for 32.7 percent of negative equity in the U.S.
Of the largest 25 metropolitan areas, Tampa-St. Petersburg-Clearwater, Fla. had the highest percentage of mortgaged properties in negative equity at 44.1 percent, followed by Miami-Miami Beach-Kendall, Fla. (40.7 percent), Atlanta-Sandy Springs-Marietta, Ga. (38.1 percent), Phoenix-Mesa-Glendale, Ariz. (36.6 percent), and Riverside-San Bernardino-Ontario, Calif. (35.7 percent).
Of the total $628 billion in negative equity, first liens without home equity loans accounted for $313 billion aggregate negative equity, while first liens with home equity loans accounted for $315 billion.
6.5 million upside-down borrowers hold first liens without home equity loans. The average mortgage balance for this group of borrowers is $213,000. The average underwater amount is $45,000.
3.9 million upside-down borrowers hold both first and second liens. The average mortgage balance for this group of borrowers is $296,000.The average underwater amount is $80,000.
The bulk of home equity for mortgaged properties is concentrated at the high end of the housing market. For example, 86 percent of homes valued at greater than $200,000 have equity compared with 72 percent of homes valued at less than $200,000.