IRVINE, CA-The universe of residential properties with at least 50% equity grew from 7.4 million in third-quarter 2013 to 9.1 million during fourth-quarter 2013, reports RealtyTrac. The firm defines these properties as “equity rich.”
In third-quarter 2013, equity-rich properties represented 16% of all residential properties with a mortgage. During fourth-quarter, this figure jumped to 18%.
“The percentage of equity-rich homeowners is nearing a tipping point that should result in a larger inventory of homes listed for sale and give the overall economy a nice shot in the arm in 2014,” says Daren Blomquist, VP of RealtyTrac. “However, there are still millions of homeowners who are in such a deep equity hole that it will take years for them to regain their equity. The longer these homeowners remain in a negative equity position without relief in the form of a principal loan balance reduction, the more likely that foreclosure will become the path of least resistance for them.”
As GlobeSt.com reported earlier today, the number of deeply underwater residential properties—worth at least 25% less than the combined loans secured by the property—in the country decreased to 9.3 million in December 2013, down from 10.7 million in September 2013, according to RealtyTrac. This number is also down from the 10.9 million properties that were deeply underwater in January 2013.
To view RealtyTrac’s interactive graphic showing home-equity profiles for the top 50 metros, click here.