CoreLogic’s latest Equity Report revealed that 91.1% of all mortgaged properties are now in a positive equity situation, while 75.9% now have significant equity (defined as more than 20%)! The report also revealed that 548,000 households regained equity in the second quarter of 2016 and are no longer under water.

Price Appreciation = Good News for Homeowners

Frank Nothaft, CoreLogic’s Chief Economist, explains:

“Home-value gains have played a large part in restoring home equity. The CoreLogic Home Price Index (HPI) for the U.S. recorded 5.2 percent growth in the year through June, an important reason that the number of owners with negative equity fell by 850,000 in the second quarter from a year earlier.”

Anand Nallathambi, President & CEO of CoreLogic, believes this is a great sign for the market in the coming year as well, as he had this to say:

“We see home prices rising another 5 percent in the coming year based on the latest projected national CoreLogic Home Price Index. Assuming this growth is uniform across the U.S., that should release an additional 700,000 homeowners from the scourge of negative equity.”

Below is a map illustrating the percentage of households in each state with significant equity: 

Many homeowners with more than 20% equity in their home would be able to use that equity as a down payment on either a larger home, or even a retirement home.

Bottom Line

If you are one of the many Americans who are unsure of how much equity you have in your home, don’t let that be the reason you fail to move on to your dream home this year!

There is no doubt that getting a mortgage is easier today than it was right after the housing crash a decade ago. However, the easing of credit availability has led to some questioning of whether or not we are headed for another housing crisis.

Let’s put everything into the proper perspective.

Mortgage Credit Availability Over the Last Three Years

Getting a home mortgage has definitely gotten easier over the last three years as evidenced by the Mortgage Credit Availability Index, issued by the Mortgage Bankers Association, in the following graph (the higher the index, the easier it is to get a mortgage):

However, if we look further back at the index we see quite a different story.

Mortgage Credit Availability Today Compared to 2006

The graph below shows the index going back to 2004, and the first graph we showed you above is represented by the small, orange, triangular section all the way in the lower-right corner.

As this visual easily illustrates, today’s index is nowhere near the levels it shot up to in 2006.

Bottom Line

Mortgage credit is definitely easing. However, we are not coming close to the lax standards that caused the housing crisis of last decade.