Approximately 850,000 more houses that had been underwater returned to positive equity during the first three months of this year.
Home prices, including distressed sales, increased by an “impressive” 12.1 percent in April, according to Corelogic’s home price report released Wednesday. This was the biggest year-over-year gain since February 2006 and the 14th consecutive increase in home prices.
Month-over-month, home prices increased 3.2 percent in April compared to March, and are forecast to rise by 13.2 percent from May 2012 and by 3.1 percent month-over-month.
“For the second consecutive month, all 50 states registered year-over-year home price gains, excluding sales of distressed homes. We expect this trend to continue, bolstered by tight supplies and pent-up buyer demand,” Anand Allathambi, president and CEO of Corelogic, said in a statement.
But despite double-digit gains in April, home prices nationwide remained 22.4 percent below their April 2006 peak.
The total number of mortgaged houses with positive equity stands at 39 million, according to the first quarter report. Approximately 850,000 more houses that had been underwater—meaning that the balance owed on a home loan is greater than what the home is worth—returned to positive equity during the first three months of this year.
Nationwide as of March, 9.7 million of homeowners with a mortgage owned more on their homes than what they were worth. This is down from 12.1 million at the end of 2011. The country’s negative equity dropped more than $50 billion to $580 billion as of March, the CoreLogic report found.
Nevada reported the highest percentage of mortgaged properties in negative equity, followed by Florida and Michigan. Nevada also topped the five states that registered the highest year-over-year price appreciation in April, followed by California, Arizona, Hawaii, and Oregon.
Houses out from underwater can buoy the economy, as homeowners with equity in their homes can refinance and take advantage of lower interest rates. Others who wished to pursue job opportunities elsewhere but could not afford to move because their homes were underwater could now put their homes on the market.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.