by Calculated Risk on 3/19/2013 09:57:00 AM

From CoreLogic: CoreLogic reports 200,000 More Residential Properties Return to Positive Equity in Fourth Quarter of 2012

CoreLogic ... today released new analysis showing approximately 200,000 more residential properties returned to a state of positive equity during the fourth quarter of 2012. This brings the total number of properties that moved from negative to positive equity in 2012 to 1.7 million and the number of mortgaged residential properties with equity to 38.1 million. The analysis also shows that 10.4 million, or 21.5 percent of all residential properties with a mortgage, were still in negative equity at the end of the fourth quarter of 2012. This figure is down from 10.6 million properties, or 22 percent, at the end of the third quarter of 2012.

... At the end of the fourth quarter, 2.3 million residential properties had less than 5 percent equity, referred to as near-negative equity. Properties that are near negative equity are at risk should home prices fall. ...

“In the fourth quarter we again saw an improvement in the equity position of households,” said Dr. Mark Fleming, chief economist for CoreLogic. “Housing market improvements, particularly in the hardest hit states, are the catalyst for households to regain equity and become participants in 2013’s housing market.”
emphasis added

Click on graph for larger image.

This graph shows the break down of negative equity by state. Note: Data not available for some states. From CoreLogic:

"Nevada had the highest percentage of mortgaged properties in negative equity at 52.4 percent, followed by Florida (40.2 percent), Arizona (34.9 percent), Georgia (33.8 percent) and Michigan (31.9 percent). These top five states combined account for 32.7 percent of negative equity in the U.S."

The second graph shows the distribution of home equity. Just under 10% of residential properties have 25% or more negative equity - it will be long time before those borrowers have positive equity. But other borrowers are close.

More from CoreLogic: "Of the properties in negative equity, 1.8 million, or 3.7 percent of all residential properties with a mortgage, had current estimated loan-to-value (LTV) ratios between 100 and 105, referred to as near-equity. If home prices were to rise another 5 percent, these properties would move into a positive equity position."

According to CoreLogic, 1.7 million borrowers returned to positive equity from negative equity in 2012. I expect a similar number will return to positive equity in 2013.