CoreLogic: 15.9% of metro-area mortgages in negative equity
IN THE THIRD quarter of 2013, 15.9 percent of all residential properties in the Providence-Warwick metro area registered negative equity, down from 16.7 percent in the second quarter. Statewide, Rhode Island’s third-quarter share of negative equity and near negative equity was the eighth largest in the country, at 19.6 percent.
PROVIDENCE – The number of residential properties in the Providence-Warwick metro area in negative equity fell to 56,063 in the third quarter of 2013 from 58,292 in the second quarter, according to a CoreLogic report released Tuesday.
Negative equity, also referred to as “underwater” or “upside down,” means that the borrower owes more on his mortgage than his home is worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.
The third quarter figure for Providence-Warwick represents 15.9 percent of all residential properties in the metro area, compared with the second quarter figure of 16.7 percent.
An additional 3 percent, or 10,708 residential properties, were in near negative equity for the third quarter in the metro area, a slight drop from the 3.2 percent, or 11,111 properties, in near negative equity for the second quarter.
The Tuesday CoreLogic report reflected changes to the U.S. Office of Management and Budget’s delineated metro areas, shifting the CoreLogic reporting area for Rhode Island to Providence-Warwick instead of the previously reported Providence-New Bedford-Fall River area.
“We should see a further rebound in consumer confidence and economic growth in 2014 as more homeowners escape the negative equity trap,” said Anand Nallathambi, president and CEO of the Irvine, Calif.-based CoreLogic. “Home price appreciation has helped more than 3 million property owners regain equity since the first quarter of 2013.”
Nationally, 13 percent of all residential properties with a mortgage, or 6.4 million homes, were still in negative equity at the end of the third quarter, down from 14.7 percent, or 7.2 million homes, at the end of the second quarter.
The national aggregate value of negative equity was $397 billion at the end of the third quarter, compared with $430 billion at the end of the second quarter, a decline of $33.7 billion.
Statewide, Rhode Island’s share of negative equity and near negative equity was the eighth largest in the country, at 19.6 percent. Of the 231,668 total mortgages in the state, 45,459 were in negative equity or near negative equity in the third quarter.
Massachusetts ranked 25th among the 50 U.S. states, with 12.7 percent, or 191,411, of the 1.5 million mortgages in the state either in negative equity or near negative equity.