As home prices continue to rise, the number of underwater borrowers has fallen over the years significantly to the point where 92 percent of all mortgaged properties are in positive equity territory, according to a recent report from Fannie Mae.
Fannie Mae reports that in the first quarter of this year, 46.7 million properties had positive equity levels, while 4 million borrowers were underwater, or owed more on their mortgages than their homes are worth. They have attributed their data collection to be sourced from CoreLogic. They state that factors they believe can lead to negative equity include a decline in a home’s value, an increase in mortgage debt, or both factors combined.
The report notes that out of 176 cities that CoreLogic tracks, San Francisco topped those with the highest percentage of homes in positive equity territory in the first quarter of 2016. Additionally, the home equity positions of some of the 10 biggest cities have seen dramatic improvements when comparing the first quarter of 2010 to the first quarter of 2016.
Specifically, Fannie Mae cites certain areas that have seen large percentage increases such as San Francisco-Redwood City-South San Francisco, California jumped from 90.1 percent in 2010 to 99.4 percent in 2016. Houston-The Woodlands-Sugar Land, Texas increase from 85.6 percent in 2010 to 98.3 percent in 2016. Denver-Aurora-Lakewood, Colorado increased to 98.3 percent in 2016 from 2010 where it sat at 75.2 percent. Los Angeles-Long Beach-Glendale, California rose from 72.8 percent in 2010 to 96.1 percent in 2016. Boston, Massachusetts leapt from 82.1 percent in 2010 to 94.3 percent in 2016.
Fannie Mae also presents data from New York-Jersey City-White Plains, New York/New Jersey that jumped from 86.9 percent in 2010 to 94.0 percent in 2016. The Washington D.C. -Arlington-Alexandria area rose significantly from 69.6 percent in 2010 to 89.1 percent in 2016. The Chicago-Naperville-Arlington Heights region of Illinois increased from 71.7 percent in 2010 to 83.3 percent in 2016. Miami-Miami Beach-Kendall, Florida nearly doubled from 46.7 percent in 2010 to 80.4 percent in 2016. Finally, Las Vegas-Henderson-Paradise, Nevada increased a whopping 4 times its percentage of 22.4 in 2010 to 80.1 in 2016.
Fannie Mae also notes that Las Vegas’ percentage of homes in positive equity territory grew 57.7 percent in that period, but it’s still among the 10 cities with the lowest equity positions that CoreLogic tracked in the first quarter of this year.
These top 10 cities with the highest percentage of homes in negative equity territory for Q1 of 2016 include Ocala, Florida at 21.3 percent; Las Vegas-Henderson-Paradise, Nevada at 19.9 percent; Miami-Miami Beach-Kendall, Florida at 19.6 percent; Lakeland-Winter Haven, Florida at 18.8 percent; Atlantic City-Hammonton, New Jersey at 18.4; Detroit-Dearborn-Livonia, Michigan at 17.8 percent; Camden, New Jersey at 17.2 percent; Flint, Michigan at 17.1 percent; Orlando-Kissimmee-Sanford, Florida at 17 percent; and finally Cleveland-Elyria, Ohio at 16.9 percent.
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