CoreLogic, a provider of information, analytics and business services, released data on Monday that show that negative equity in residential properties has declined in Q3. This is the third consecutive quarter in which negative equity has declined.
In Q2, 11 million, or 23%, of all residential properties with mortgages were in negative equity; in Q3, that has fallen to 10.8 million, or 22.5%. Before anyone gets excited about a housing recovery, however, CoreLogic says that this decrease is “due primarily to foreclosures of severely negative equity properties rather than an increase in home values.”
The data also show that 2.4 million borrowers were near negative equity; in other words, they held less than 5% equity in their homes in Q3. Mortgages with negative equity and those with near-negative equity made up 27.5% of all residential properties with mortgages across the country.