In more good news for the real estate market, thousands of Albuquerque-area residents have regained equity in their homes.
At the end of last year, 5.3% of all residential properties with mortgages in the metro area, or 9,359 homes, were in negative equity. That compares to 9.5 percent in December 2015, or 16,701 homes, according to home-equity data from CoreLogic. Having negative equity, often referred to as being "underwater" or "upside down," applies to borrowers who owe more on their mortgages than their homes are worth. Negative equity, one of the long shadows cast by the housing bubble, can occur because of a decline in home value, an increase in mortgage debt or both.
The growth in equity could prompt more people to put their properties up for sale, relieving the tight inventory that has been driving up metro area prices, said Don Martindell, president of the Greater Albuquerque Association of Realtors.
CoreLogic's analysis of New Mexico's 250,000 outstanding mortgages showed an average gain of $12,000 in home-equity wealth last year. Average home-equity gains rose by $13,700 for U.S. homeowners during 2016.
Nationally, slightly more than million borrowers regained equity last year, leaving just 6.2% of mortgages on U.S. homes underwater. At the peak of the foreclosure crisis in 2009, more than 25% of all homes were in negative equity, according to CoreLogic.
"The equity buildup has been supported by home-price growth and paydown of principal," said Frank Nothaft, chief economist for CoreLogic in a prepared statement.
"Home-equity gains were strongest in faster-appreciating and higher-priced home markets" such as Washington state and Oregon, which saw average rises of $31,000 and $27,000, respectively.
Nevada and Florida had the highest percentages of homes with negative equity, at 13.6% and 11.6%, respectively, according to CoreLogic.
