U.S. home equity continues to improve

NEW YORK – Jan. 12, 2015 – Average equity on all financed homes in the nation continued to grow as hundreds of thousands of borrowers moved into the black.

As of the third quarter of last year, the average loan-to-value ratio (LTV) on all U.S. residential loans was 58.9 percent.

The nation's collective equity position improved from the second quarter, when the average LTV ratio was 59.2 percent.

In the third quarter of 2013, the average LTV ratio was 61.7 percent.

The statistics were outlined in CoreLogic Inc.'s Equity Report Third Quarter 2014.

The average U.S. LTV ratio had been as high as 71.3 percent in the fourth-quarter 2011.

Hawaii had an average LTV ratio of 45.3 percent, the lowest in the nation. Close behind was New York's 46.8 percent. After that was 52.3 percent in California, 52.4 percent in Massachusetts and 54.4 percent in Washington, D.C.

Nevada's 74.6 percent average LTV ratio was the highest in the country.

By major metropolitan statistical areas, the Tampa MSA's 72.6 percent was highest, and the Nassau County-Suffolk County, N.Y., MSA's 47.3 percent was lowest.

As of the third quarter, 5.1 million U.S. properties had LTV ratios in excess of 100 percent. The amount of negative equity for the upside-down group was $338 billion.

The number of underwater properties declined from 5.4 million in the prior period and 6.5 million during the same period in 2013.

By home value, 15 percent of properties valued at less than $200,000 were in a negative-equity position versus just 6 percent of properties worth more than $200,000.

In all, 273,000 U.S. properties regained equity during the third quarter.

Texas had the lowest share of properties with negative equity. Other states that also had less than 5 percent of all properties in a negative-equity position were Montana, Alaska, Hawaii, North Dakota and Indiana.

More than a quarter of Nevada properties had LTV ratios above 100 percent – the worst share in the nation.

The default rate on mortgages with LTV ratios less than 85 percent was less than 1 percent. But the default rate jumped past 3 percent when LTV ratios were 115 percent or higher.

Mortgages outstanding amounted to $8.751 trillion as of the most-recent period, up from $8.685 trillion three months earlier and $8.574 trillion a year earlier.