Approximately three-quarters of a million single-family residential homes regained equity in the second quarter of 2015 , bringing the nationwide total of mortgaged residential properties with equity up to 45.9 million (91 percent), according to data released by CoreLogic  on Tuesday.
The number of homes regaining equity totaled about 759,000 for Q2, which translated to a year-over-year increase in borrower equity of about $691 million for the quarter, according to CoreLogic. About 8.7 percent of all residential homes with a mortgage, or about 4.4 million properties, were in negative equity in Q2 2015– both declines from 10.9 percent and 5.4 million from the same quarter a year earlier.
"For much of the country, the negative equity epidemic is lifting. The biggest reason for this improvement has been the relentless rise in home prices over the past three years which reflects increasing money flows into housing and a lack of housing stock in many markets," said Anand Nallathambi, president and CEO of CoreLogic. "CoreLogic predicts home prices to rise an additional 4.7 percent over the next year, and if this happens, 800,000 homeowners could regain positive equity by July 2016."
"For much of the country, the negative equity epidemic is lifting."
Homeowners with negative equity owe more on their mortgages than their homes are worth and are often referred to as "upside down" or "underwater" homeowners. Declines in home values or increases in mortgage debts, or a combination of both, can cause a negative equity situation in a home. The national aggregate value of negative equity at the end of Q2 was approximately $309.5 billion, which was a decline from $338 billion at the end of Q1 and from $350 billion year-over-year (11.6 percent), according to CoreLogic.
Out of the approximately 50 million residential homes with a mortgage nationwide, about 17.8 percent (about 9 million) had less than 20 percent equity at the end of Q2, which is commonly referred to as being "under-equitied," according to CoreLogic. Borrowers who are under-equitied often have a difficult time refinancing their homes or obtaining a loan to buy a new home because of underwriting constraints. About 1.1 million, or 2.3 percent, of homes had less than 5 percent equity at the end of Q2, which is known as "near negative equity"; these borrowers are at risk of falling into negative equity if home prices drop, according to CoreLogic.
"Home price appreciation and foreclosure completions both reduce the number of homeowners with negative equity, the latter because most homeowners who lost homes through foreclosure had some level of negative equity," said Frank Nothaft, chief economist for CoreLogic. "Between June 2014 and June 2015, the CoreLogic national Home Price Index (HPI) rose 5.6 percent and we reported the number of homes completing foreclosure proceedings exceeded one-half million. Both of these factors helped reduce the number of homeowners with negative equity by one million over the year ending in June."
The state and metro area with the highest percentage of homes with equity at the end of Q2 were Texas and Houston with 97.9 percent and 98.1 percent, respectively. The state and metro area with the highest percentage of homes with negative equity were Nevada and Tampa with 20.6 percent and 20.2 percent, respectively.