Homeowners with mortgages have seen their equity increase 9.4 percent year over year, a gain of almost $775.2 billion since the third quarter of 2017.

Also, the average homeowner gained $12,400 in home equity between the third quarter of 2017 and the third quarter of 2018, according to the Home Equity Report from Corelogic.

While home equity grew in almost every state in the nation, western states experienced the most significant increases. California homeowners gained an average of around $36,500 in home equity, and Nevada homeowners experienced an average increase of approximately $32,600 in home equity.

From the second quarter of 2018 to the third quarter of 2018, the number of homes with negative equity decreased 4 percent to 2.2 million homes, or 4.1 percent of all mortgaged properties. Year over year, the number of mortgaged properties in negative equity fell 16 percent from 2.6 million homes, or 5 percent of all mortgaged properties, in the third quarter of 2018. Fully 63% of Homeowners have a mortgage.

“On average, homeowners saw their home equity increase again this quarter but not nearly as much as in previous quarters,” said Dr. Frank Nothaft, chief economist for CoreLogic. “During the third quarter, homeowners gained an average of $12,400 compared to the second quarter when the average home equity wealth increase was more than $16,000. This lower year-over-year gain reflects the slowing in appreciation we’ve seen in the CoreLogic Home Price Index.”

[caption id="attachment_7571" align="alignleft" width="294"]  Negative equity has declined year over year.[/caption]

Negative equity, often referred to as being underwater or upside down, applies to borrowers who owe more on their mortgages than their homes are worth.

Negative equity can occur because of a decline in a home’s value, an increase in mortgage debt or both. Negative equity peaked at 26 percent of residential properties with a mortgage in the fourth quarter of 2009, based on the CoreLogic equity data analysis which began in the third quarter of 2009. 

The national aggregate value of negative equity was around $281.6 billion at the end of the third quarter of 2018. This is down year over year by approximately $2.7 billion, from $279 billion in the third quarter of 2017.

“The number of homes in a negative equity position have remained around 2.2 million for two consecutive quarters this year,” said Frank Martell, president and CEO of CoreLogic. “Without equity, those homeowners are unable to sell their homes and are more likely to transition from delinquency to foreclosure if they face financial distress.”