Homeowner equity is on the mend. A new report by CoreLogic reveals that as of the first quarter of 2013, 850,000 homeowners no longer owe more on their mortgages than their homes are worth – these homeowners now enjoy what is called positive equity.
Many loans had suffered from negative equity – “underwater” or “upside-down” mortgages in which the amount owed is more than the value of the property, according to home and real estate marketplace website Zillow.com.
Rising home prices are driving reduced numbers of underwater mortgages. The total value of negative homeowner equity in the U.S. decreased by $50 billion to $580 billion since the end of the fourth quarter of 2012, a decline of 8.7 percent. The number of homes with negative equity declined 21.7 percent over the quarter.
Another recent CoreLogic report illustrates that year-over-year, home price growth in April was at the highest level since February 2006; prices rose 12.1 percent in April 2013 over April 2012. That study predicts prices will continue to rise.
This optimism is echoed by the most recent National Association of Realtors Confidence Index from April 2013, which shows that the majority of Realtors across the country have a positive six-month outlook. This stems in part from the fact that 86 percent of 50,000 the Realtors surveyed report constant or increasing prices in the real estate market.
Fannie Mae’s Economic & Strategic Research Group also reveals that housing news has been largely positive this year, with key indicators such as home sales, home prices and homebuilding “showing signs of long-term improvement toward normal levels.” The report explains that this news is the result of a prolonged period of steady economic growth.
An aspect of this good economic news is evident in the latest jobs outlook from the U.S. Bureau of Labor Statistics (BLS). According to the most recent Employment Situation Summary employment increased by 175,000 jobs in May, approximately 10,000 more jobs than were added in April.
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