The share of borrowers who owe more than the worth of their homes dropped to less than 20 percent in the first three months of the year. At the same period, prices went up in hard hit markets. This was according to data from CoreLogic Inc.
Around 850,000 residential properties got positive equity during the first quarter. The number of underwater homes was left at 9.7 million or 19.8 percent of all homes in the United States with mortgages. It was down from 21.7 percent at the end of 2012.
Values of homes are going up as buyers compete for tight inventories of properties. Home prices in April increased 12.1 percent compared to the previous year. This was the biggest gain since February 2006. The largest increase was in Nevada with 24.6 percent, in which 45.4 percent of mortgaged properties are upside down on their homes. This was the highest in any other state.
Anand Nallathambi, president and chief executive officer of CoreLogic, said that the negative equity would continue to go down across the nation due to the rising value of homes. He added that the home price levels are still below the peak but the low supplies in most areas as well as the high demand for single family homes would help close the gap.
The combined value of negative equity in the United States dropped to $580 billion in the first quarter compared to $631 billion at the end of 2012. Most of home equity is found a thehigh end of the market. For mortgaged homes with values more than $200,000, 88 percent are above water. For mortgaged homes lower than $200,000, 73 percent are above water.
California has a negative equity share of 21.3 percent with the total mortgages at 6,747,00 and average loan t value ratio o 63.4 percent. New Hampshire also has a negative equity share of 21.3 percent.