Home price appreciation during the first quarter of 2014 resulted in 312,000 borrowers regaining equity in their properties.
The overall number of mortgaged residential properties with equity is now more than 43 million, according to CoreLogic data released Thursday. But out of all borrowers whose properties are in positive equity, about 10 million are deemed to be "under-equitied," with less than 20% of equity, CoreLogic says. This means borrowers have a harder time refinancing their existing homes or obtaining new financing to sell and buy another asset due to underwriting constraints.
Under-equitied mortgages accounted for 20.6% of all residential properties in the U.S., the Irvine, Calif.-based analytic provider says. CoreLogic added that at least 1.5 million homes have less than 5% equity.
Meanwhile, approximately 6.3 million homes or 12.7% of all residential properties are still underwater—meaning borrowers owe more on their mortgages than their homes are worth. A year ago, the negative equity share was 20.2% representing 9.8 million households.
Nevada had the most mortgaged properties in negative equity, 29.4%, in the first quarter. Other states that had at least 20% of homes underwater at the end of the first quarter include Florida, Mississippi and Arizona. Illinois was slightly under the 20% mark at 19.7%.
The national aggregate value of negative equity at the end of the first quarter was $383.7 billion, CoreLogic says, down $16.9 billion on a quarterly basis.
"Despite the massive improvement in prices and reduction in negative equity over the last few years, many borrowers still lack sufficient equity to move and purchase a home," said Sam Khater, deputy chief economist for CoreLogic, in the report. "One in five borrowers have less than 10% equity in their property, which is not enough to cover the down payment and additional costs associated with a conventional mortgage."