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Negative Equity Report: CoreLogic – Top 10 States

By on January 9, 2014 in Market Updates

CoreLogic’s negative equity analysis report in the third quarter of 2013 insists that if we are able to see an increase of an additional five percent in home prices, approximately 1.2 homes would be able to regain positive equity. The third quarter also showed the top 10 states currently struggling with negative equity. Nevada led the top 10 states with 32.2% in the following order:

1. Nevada = 32.2% (average LTV of 80.5%)
2. Florida = 28.8% (average LTV of 72.3%)
3. Arizona = 22.5% (average LTV of 71.8%)
4. Ohio = 18.0% (average LTV of 72.0%)
5. Georgia = 17.8% (average LTV of 71.1%)
6. Illinois and Michigan = 17.7% (average LTV of 68% and 68.8%)
7. Rhode Island = 16.6% (average LTV of 61.2%)
8. Maryland = 15.6% (average LTV of 64.1%)
9. Mississippi = 14.3% (average LTV of 72.3%)
10. New Hampshire = 13.9% (average LTV of 67%)

Illinois and Michigan tied for sixth place with 17.7%, however, despite being in sixth place; Michigan has definitely shown improvement since the last quarter report where they landed on number four with 22.5% negative equity.

About half of these states listed are in fact trying to improve their state’s economy with the help of the HARP Refi Plan. States like; Nevada, Florida, Arizona, Ohio, Georgia, Illinois, Michigan, and Maryland are also among the states with high HARP Refinance volumes listed in a recent FHFA HARP Refinance report in the third quarter of 2013. This government-backed refinance program has helped millions of underwater homeowners rebuild equity back into their homes since 2009 by helping to reduce their monthly mortgage and/or switching to a better and shorter loan term.

Click Here to Read More About the HARP Refinance Plan

Based on the CoreLogic’s data analysis findings, the national residential equity report showed in comparison how much the states have improved since the third quarter of 2010. The percentage of borrowers with LTVs greater than 125% dropped from 11.5% down to 5%, the number of negative equity properties decreased from 11.6 million to 6.4 million, and the nation’s average LTV declined by 9.2% (70.6 down to 61.4 percent).

CoreLogic’s Chief Economist, Dr. Mark Fleming says, “Rising home prices continued to help homeowners regain their lost equity in the third quarter of 2013. Fewer than 7 million homeowners are underwater, with a total mortgage debt of $1.6 trillion. Negative Equity will decline even further in the coming quarters as the housing market continues to improve.”

In order for the housing market to improve, we would have to see some positive changes in the economy. The national unemployment rate declined from 7.3 percent to 7 percent from October and was 0.8 percent lower than in November 2012 according to a most recent news release in regards to our employment situation as a nation (as of December 20, 2013) by the Bureau of Labor Statistics U.S. Department of Labor (BLS).

The Regional and State Employment and Unemployment news release for December is to be released on Tuesday, January 28, 2014. Perhaps the next news release may help us determine which direction the housing market is headed towards.

The top five states with the most significant changes within a one year period from November 2012 to November 2013 statistically are:

1. California – Started out with 9.9%, decreased to 8.5% resulting in a 1.4% change.
2. Colorado – Started out with 7.6%, decreased to 6.5% resulting in a 1.1% change.
3. Florida – Started out with 8.0%, decreased to 6.4% resulting in a 1.6% change.
4. Georgia – Started out with 8.7%, decreased to 7.7% resulting in a 1% change.
5. Hawaii – Started out with 5.3%, decreased to 4.4% resulting in a 0.9% change.

States such as California and Florida are large states, so to see a change in unemployment rates is pretty impressive while there are other states that continue to see an increase. Nonetheless, based on the recent report from CoreLogic, more than three quarters of a million homes have regained positive equity and the next report may reveal some more positive changes.

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About the Author

About the Author: Jessica Lucas is the managing editor for Mortgage Home Base, a top real estate finance blog dedicated to helping borrowers and home buyers understand the home loan process. Follow Jessica on Google +, and share your comments here. .
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