The analysis indicated that homeowners are breaking away from the negative equity trap. It reflected a decrease in negative equity of total mortgaged residential properties by 4 percent in 2018, compared to 4.1 percent the previous year. Compared to the third quarter of 2017, negative equity decreased 16 percent from 2.6 million homes, or 5 percent of all mortgaged properties.
According to the CoreLogic, at the end of the third quarter of 2018, the national aggregate of negative equity recorded an approximate of $281.6 billion—a drop every quarter by approximately $1.1 billion, from $280.5 billion in the second quarter of 2018. Compare this to 2009, negative equity peaked at 26 percent of mortgaged residential properties.
Nationally, the average homeowner gained approximately $12,400 in equity during the past year, with California recording the highest year-over-year average increase at $36,500. At the metropolitan level, negative equity continues to improve across the country, with the exception of Miami-Miami Beach and Kendall-Florida, at 11.2 percent year over year, the report found.
“The number of homes in a negative equity position has remained around 2.2 million for two consecutive quarters this year. Without equity, those homeowners are unable to sell their homes and are more likely to transition from delinquency to foreclosures if they face financial distress,” said Frank Nothaft, Chief Economist at CoreLogic.