More homeowners in the United States were able to take control of their mortgage payments in the second quarter of the 2014, according to CoreLogic's latest home equity report.
Negative equity is when the mortgage amount exceeds the value of the home. Negative equity occurs due to either of the reasons - a decline in home values, an increase in mortgage debt, or a combination of both.
The CoreLogic report claims that about 950,000 homes regained positive equity in the second quarter of 2014. The report also found that nearly 5.3 million homes were under water or in negative equity compared to the 6.3 million homes underwater in the first quarter of 2014 - a 1 million decrease in negative equity.
The report also found that across the nation, borrower equity in the second quarter of 2014 increased to one trillion on a year over year basis.
Currently, 44 million homes are in positive equity of which 9 million have less than 20 percent equity on their home and 13 million have less than 5 percent equity on their borrowed mortgage.
"The increase in borrower equity of $1 trillion from a year earlier is evidence that things are moving solidly in the right direction," Sam Khater, deputy chief economist for CoreLogic, said in a statement.
"Borrower equity is important because home equity constitutes borrowers' largest investment segment and, as a result, is driving forward the rise in wealth for the typical homeowner," Khater added.
Experts attributed this rise in positive equity homes to the rise in home prices, which has been slowing down for the better or the worse. They added that if home prices rose by at least 5 percent another million people would regian equity on their homes.
"Many homeowners across the country are seeing the equity value in their homes grow, which lifts the economy as a whole," Anand Nallathambi, president and CEO of CoreLogic added in the statement.
"With more and more borrowers regaining equity, we expect homeownership to become an increasingly attractive option for many who have remained on the sidelines in the aftermath of the great recession. This should provide more opportunities for people to sell their homes, purchase a different home or refinance an existing mortgage," Nallathambi added.
Below are the five states with the highest positive equity rates in the country (courtesy: Realtor Mag):
- Texas: 97.3%
- Alaska: 96.5%
- Montana: 96.4%
- North Dakota: 96%
- Hawaii: 96%
