Business & Investment

1.2 million homes with negative equity in the second quarter of 2021

NS Calculated risk of September 23, 2021 09:33:00 AM

From CoreLogic: Homeowners Acquired $ 2.9 Trillion Shares In Q2 2021 CoreLogic Report

CoreLogic® … released today Homeowner Equity Report According to the report, U.S. homeowners with mortgages (accounting for about 63% of all properties) showed an equity increase of 29.3% year-on-year, with total equity profits exceeding $ 2.9 trillion, averaging. Profit of $ 51,500 per borrower since the second quarter of 2020.

“The increase in homeowner’s capital provides a strong financial cushion for tens of millions of Americans. For those most affected by the pandemic, equity acquisition is important in avoiding foreclosures. “It will play a role,” said Frank Martell, President and CEO of CoreLogic. “Based on next year’s economic activity and expected increases in home prices, we anticipate a further increase in equities and a corresponding decrease in negative equities, foreclosure rates and foreclosures.”

Negative equity, also known as underwater or upside-down mortgages, applies to borrowers who are borrowing more mortgages than the current value of the home. As of the second quarter of 2021, negative equity shares and quarterly and year-over-year changes are as follows:

• Quarterly changes: From the first quarter of 2021 to the second quarter of 2021. The total number of negative equity mortgages fell 12% to 1.2 million units, or 2.3% of all mortgage properties...

• Annual change: In the second quarter of 2020, 1.8 million homes, or 3.3% of all mortgage real estate, were negative equity. This number decreased by 30% in the second quarter of 2021, or 520,000 properties.

• The national total of negative equity at the end of the second quarter of 2021 was approximately $ 268 billion. This is a quarterly decrease of about $ 5.2 billion, or 1.9%, from $ 273.2 billion in the first quarter of 2021. It increased by about $ 18.9 billion, or 6.6%, from $ 286.8 billion in the second quarter of 2020.
Emphasis added

Click the graph to see the enlarged image.

This graph from CoreLogic compares the stock distribution by LTV in the second and first quarters of 2021. There are some properties with LTV above 125%. However, most homeowners have a significant amount of capital. This is a very different situation than at the start of the residential bust, where many homeowners had little fairness.

Year-over-year, the number of negatively capitalized homeowners decreased from 1.8 million to 1.2 million.

1.2 million homes with negative equity in the second quarter of 2021 1.2 million homes with negative equity in the second quarter of 2021

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