Nearly 800,000 homes returned to a state of positive equity during the third quarter—leaving about 6.4 million underwater, according to the latest data fromCoreLogic.
The real estate analytics and services provider released on Tuesday a new analysis of the nation’s mortgaged homes, showing an increase of 791,000 in the number of properties with positive equity. As of the end of Q3, there were 42.6 million properties in the United States that were above water, CoreLogic reported.
The increase in equity brought the share of underwater properties down to about 13 percent from 14.7 percent in the second quarter.
Of all the states, Nevada held the highest percentage of underwater properties last quarter, reporting a negative equity rate of nearly one-third (32.2 percent).
Florida took the second spot with a rate of 28.8 percent, followed by Arizona (22.5 percent), Ohio (18.0 percent), and Georgia (17.8 percent).
Together, the top five states accounted for about 36.4 percent of negative equity in the country.
“Rising home prices continued to help homeowners regain their lost equity in the third quarter of 2013,” said Mark Fleming, chief economist for CoreLogic. “Fewer than 7 million homeowners are underwater, with a total mortgage debt of $1.6 trillion.”
Fleming said he expects negative equity to decline further in the coming quarters as housing conditions keep improving.
The numbers indicate a little more complexity in the market, however. Of the 42.6 million residential properties in positive equity, CoreLogic estimates 10 million have less than 20 percent equity, and more than 1.5 million are at less than 5 percent equity.
These “under-equitied” borrowers may have a more difficult time obtaining new financing for their homes, and those closer to the “waterline” are at risk of falling back under should home prices fall, CoreLogic explained.