The Equity Report 2017; Your home may be worth WAY more than you think!

There is no doubt that the US real estate sector is still booming, with prices continuously rising in many markets across the nation. In fact, home prices have climbed higher for 53 straight months now, allowing many home sellers to cash in – and many others to escape a negative equity situation.

In fact, in just the first three quarters of 2016, U.S. homeowners saw their equity rise by $837 billion.

The party kept going as homeowner equity increased to $63 billion in the fourth quarter of 2016, according to real estate data analysis firm CoreLogic. With those strong equity gains to finish out 2016, an estimated 62,000 homeowners across the country went from the red to the black in their home’s value in those three months alone.

Rolling into 2017, 48 million U.S. homeowners had positive equity in their homes. Even better, 13,125,367 U.S. homeowners were in an equity-rich position (loan-to-value ratio of 50 percent or lower), representing 23.4 percent of all U.S. homeowners with a mortgage and an increase of more than 2.6 million from a year ago.

In total, U.S. homeowners now have approximately $11.2 trillion in untapped home equity. Interestingly, $6.2 trillion of that total equity belongs to homeowners 62 years and older.

To see how far up the equity ladder we've climbed, consider that in 2012, less than 5 years ago, we experienced the valley of underwater equity with 12.8 million homeowners owing more than their home was worth. In all, nearly 1 in 3 of all U.S. homeowners were underwater on their homes during the dark days of the Great Recession between 2010 and mid-2012.

However, since that low point, the number of seriously underwater homeowners has decreased by more than 6.7 million.

As of Q3 2016, there were 6.1 million seriously underwater properties in the U.S., which represents nearly 10.8% of all properties with a mortgage. While that seems high, it's still a decrease of 854,000 underwater homes from 2015, as the number of equity-rich homeowners has increased by 2.6 million in just that time.

However, the story about our equity gains and losses remains a tale of two groups of cities. In fact, the zip codes with the highest equity gains in the last year include:

78027 in San Antonio, TX
53.1 equity rich
Up 30%

33974 Lehigh Acres, FL
45.0% equity rich
Up 29%

97206 Portland, OR
52.6% equity rich
Up 27%

37208 Nashville, TN
45.4% equity rich
Up 27%

How about the U.S. zip codes that have the most number of properties still seriously underwater? (Seriously underwater homes are defined as have -125% or more negative equity.)

07017 East Orange, JN
62.4% seriously underwater
Number of underwater homes up 38% in the past year.

64130 Kansas City, MO
51.4% seriously underwater
Number of underwater homes up 30% in the past year.

08865 Phillipsburg, NJ
44.2% seriously underwater
Number of underwater homes up 23% in the past year.

43211 Columbus, OH
71.0% seriously underwater
Number of underwater homes up 22% in the past year.

63121 Saint Louis, MO
54.6% seriously underwater
Number of underwater homes up 22% in the past year.

While the number of seriously underwater homes seem to be most prevalent in certain metropolitan pockets, our median home prices have gone up for 18 quarters in a row, allowing a record number of homeowners to accumulate positive equity.

But it’s not just rising prices that are helping our housing market turn a profit. In fact, homeowners are staying in their houses longer before selling these days, a trend that’s allowing them to accrue more equity, as well. As of Q3 2016, the average home seller has lived in his or her home of 7.94 years, a new high based on modern data.

Before our current equity boom and the Great Recession that preceded it, the average home seller had owned their property only 4.26 years – a stark contrast.

By analyzing 88 metropolitan areas with a population of at least 500,000 people or more, data reveals that the areas with the highest share of equity-rich homeowners include:
San Jose (55.7 percent)
San Francisco (49.8 percent)
Honolulu (39.3 percent)
Los Angeles (38.2 percent)
Pittsburgh (34.5 percent)

Other metro areas in the top 10 for the highest percentage of equity-rich homeowners include Portland (33.1 percent), San Diego (33.0 percent); Oxnard-Thousand Oaks-Ventura, California (32.7 percent); Seattle (31.5 percent); and Austin, Texas (31.0 percent).

However, the same research shows which zip codes have the highest share of seriously underwater homes, including Chicago, St. Louis, Detroit, Columbus, Ohio; East Stroudsburg, Pennsylvania; Trenton, New Jersey; Cleveland, and Milwaukee.

Despite the national trend of upticking home prices and equity-rich owners, the share of seriously underwater homeowners increased in 21 of the 88 metro areas analyzed since just last year – a puzzling and concerning statistic.

But for more Americans than ever, their homes keep on rising in value, creating record equity and an opportunity to profit for prudent and opportunistic homeowners.