Nearly four million homes last year returned to a position of positive equity, leaving about 6.5 million upside-down, CoreLogic reported Thursday.
As of the end of 2013, CoreLogic estimates the number of mortgaged residential properties with equity totaled about 42.7 million, representing a share of about 86.7 percent. Due to a slowdown in the quarterly growth rate of the company's Home Price Index, the share of homes with equity versus underwater homes was mostly unchanged from Q3 to Q4.
"The rebound in home prices in 2013 helped 4 million property owners regain at least some positive equity in their largest asset—their home," said Anand Nallathambi, president and CEO of CoreLogic. "We still have a long way to go to eliminate the negative equity overhang but significant progress is being made every day across most of the country."
Of those properties with positive status, just under a quarter—10 million—are considered "under-equitied," meaning they have less than 20 percent equity; more than 1.6 million have less than 5 percent equity.
Not only does this circumstance leave borrowers at risk of going back under should prices dip, but it also means they may have a more difficult time obtaining new financing for their homes due to underwriting constraints, CoreLogic says.
As might be expected given their massive declines during the crash, Nevada, Florida, and Arizona topped the list of states with high negative equity rates, clocking in at 30.4 percent, 28.1 percent, and 21.5 percent, respectively. Following that were Ohio (19.0 percent) and Illinois (18.7 percent). Together, the five states accounted for 36.9 percent of negative equity in the fourth quarter.
An examination of the top Core Based Statistical Areas (CBSAs) looked very much the same, with the Orlando-Kissimmee-Sanford area leading at 31.5 percent, followed by Tampa-St. Petersburg-Clearwater (30.4 percent).
Also making the list were Phoenix-Mesa-Scottsdale (22.1 percent), Chicago-Naperville-Arlington Heights (21.4 percent), and Atlanta-Sandy Springs-Roswell (19.9 percent).
The national aggregate value of negative equity for underwater homes last quarter was $398.4 billion, down from $401.3 billion the prior period.