According the data analytics firm CoreLogic, the number of mortgaged homes underwater decreased in the second to third quarter by 1.7%, amounting to over 790,000 homeowners returning to positive equity. Currently, around 6.4 million homes, or 13% of the market are still underwater. When compared to the 10.7 million homes reported as underwater (22% of the market at that time), this quarter’s data indicates a year over year decrease in the number of underwater homes by nearly one third.
According to CoreLogic’s chief economist Mark Fleming, the decrease in underwater mortgages is attributed by CoreLogic should be attributed to rising home prices. As the housing market further improves in the coming year, the both Fleming and the firm’s CEO Anand Nallathambi expect to see further decreases in negative equity in 2014, “We should see a further rebound in consumer confidence and economic growth in 2014 as more homeowners escape the negative equity trap.”
The majority of the positive equity reported this quarter was concentrated at the higher end of the housing market. 92% of homes valued for more than $200,000 have equity, while only 82% of homes priced for less than $200,000 also have equity.
Of the total homes in positive equity, 10 million have less than 20% equity, and 1.5 million homes have less than 5% equity.
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