CoreLogic: 13.5% of R.I. properties ‘upside down’ in 4Q

CORELOGIC SAID Rhode Island had 13.5 percent of mortgaged properties in negative equity in the fourth quarter, the fifth-highest percentage in the nation. / COURTESY CORELOGIC
CORELOGIC SAID Rhode Island had 13.5 percent of mortgaged properties in negative equity in the fourth quarter, the fifth-highest percentage in the nation. / COURTESY CORELOGIC

PROVIDENCE – Rhode Island had 13.5 percent of mortgaged residential properties in negative equity in the fourth quarter, the fifth-highest percentage in the nation, CoreLogic said Thursday.
The Ocean State trailed only Nevada, which had the highest percentage at 19.7 percent; followed by Florida, 17.1 percent; Illinois, 14.6 percent; and Arizona, 14 percent.
In Rhode Island, 32,196 mortgages were in negative equity out of 238,277 mortgaged properties. Another 2.6 percent were in near-negative equity, meaning they have less than 5 percent equity.
Negative equity, also known as being “underwater” or “upside down,” refers to borrowers who owe more on their mortgages than their homes are worth. It can occur due to a decline in home value, increase in mortgage debt, or a combination of both.
In the Providence-Warwick metropolitan area, 12.1 percent, or 43,563 properties, were in negative equity in the fourth quarter, a decrease from 14.7 percent, or 52,382 properties, in the fourth quarter of 2014. Another 9,192 properties, or 2.6 percent, were in near-negative equity compared with 10,510, or 3 percent, a year ago.
Nationwide, there were 4.3 million mortgaged residential properties, or 8.5 percent, with negative equity in the fourth quarter. That is a decrease year over year from 5.3 million homes, or 10.7 percent.
CoreLogic said approximately 2.6 million underwater borrowers hold first liens without home equity loans, and that the average mortgage balance for this group of borrowers is $240,000 and the average underwater amount is $65,000.
In addition, approximately 1.7 million underwater borrowers hold both first and second liens. The average mortgage balance for this group of borrowers is $304,000 and the average underwater amount is $82,000.
CoreLogic said “the bulk of positive equity” for mortgaged residential properties is concentrated at the high end of the housing market, as 95 percent of homes valued at $200,000 or more have equity compared with 87 percent of homes valued at less than $200,000.

“The number of homeowners with more than 20 percent equity is rising rapidly,” Anand Nallathambi, president and CEO of CoreLogic, said in a statement. “Higher prices driven largely by tight supply are certainly a big reason for the rise, but continued population growth, household formation and ultra-low interest rates are also factors. Looking ahead in 2016, we expect home equity levels to continue to build, which is a good thing for the long-term health of the U.S. economy.”

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