PROVIDENCE – Ten percent, or 36,763, of all residential properties with a mortgage were in negative equity in the second quarter in the Providence-Warwick-Fall River metropolitan area, CoreLogic said Thursday.
That’s a decline from 12.6 percent, or 44,941, in the same quarter a year ago, and 11.9 percent, or 43,036, in the first quarter this year.
An additional 8,182 properties, or 2.3 percent, were in near-negative equity in the second quarter, slightly less than 9,213, or 2.6 percent, in second quarter 2015, and 9,081, or 2.5 percent, in the first quarter.
Negative equity – known as “underwater” or “upside down” – applies to homeowners who owe more on their mortgages than their homes are worth. A decline in home value, an increase in mortgage debt, or a combination of both, can lead to negative equity.
CoreLogic said 548,000 U.S. homeowners regained equity in the second quarter compared with the previous quarter, increasing the percentage of homes with positive equity to 92.9 percent of all mortgages properties – approximately 47.2 million homes. The number of homes with negative equity hit 3.6 million, or 7.1 percent of all homes with a mortgage. That’s a decrease of 19 percent year over year from 4.5 million homes, or 8.9 percent, in the second quarter of 2015.
“Home-value gains have played a large part in restoring home equity,” Frank Nothaft, chief economist for CoreLogic, said in a statement. “The CoreLogic Home Price Index for the U.S. recorded 5.2 percent growth in the year through June, an important reason that the number of owners with negative equity fell by 850,000 in the second quarter from a year earlier.”
Said Anand Nallathambi, president and CEO of CoreLogic, “We see home prices rising another 5 percent in the coming year based on the latest projected national CoreLogic Home Price Index. Assuming this growth is uniform across the U.S., that should release an additional 700,000 homeowners from the scourge of negative equity.”
Of the 10 largest metropolitan areas by population, Miami-Miami Beach-Kendall, Fla., had the highest percentage of mortgaged properties in negative equity at 18.4 percent.
Of the same 10 largest metropolitan areas, San Francisco-Redwood City-South San Francisco, Calif., had the highest percentage of mortgaged properties in a positive equity position at 99.4 percent.
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