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With housing values rising, it’s no surprise that owners equities are rising quickly too. As of the first quarter of this year, we now have 850,000 more homes with positive equity, according to a new report from Corelogic. This is a 425% increase from the fourth quarter, when we had 200,000 more homes with positive equity. (Read more in my “Housing Equity Continues to Rise” post from March 25, 2013.) 

Negative equity means that a borrower owes more on a home than it is worth. These properties are also known as short sales, underwater or upside-down.

Here are a few of the highlights:

• The Top 5 States with Negative Equity are Nevada (45.4%), Florida (38.1%), Michigan (32%), Arizona (31.3%), and Georgia (30.5%), but their numbers improved again.
• The Top 5 States with Positive Equity are Montana (94.4%), North Dakota (94.1%), Alaska (93.9%), Texas (92.8%) and Wyoming (92.6%), it’s obvious folks don’t like debt in these states.
• Of all homes with a mortgage, 19.8% (9.7 million) are still in negative equity… down from the 21.7% (10.5 million) negative equity at the end of 2012.
• The average amount of equity for all properties with a mortgage is now 32.8% ($4.2 billion) up from 31% last quarter.
• The national total value of negative equity dropped 8.7% ($50 billion) to $580 billion at the end of the first quarter from $628 billion at the end of the fourth quarter in 2012. This decrease was driven largely by improving home prices.
• Full report by Corelogic Equity Report here.

“During the past year, 1.7 million borrowers have regained positive equity. The negative equity burden continues to recede across the country thanks largely to rising home prices. We are still far below peak home price levels, but tight supplies in many areas, coupled with continued demand for single family homes, should help us close the gap.” Anand Nallathambi, president and CEO of Corelogic.

What does this mean to you?

When housing prices were dropping, people lost their equity in their home, which turned into owing more on their homes than they were worth. This negative equity, on top of employment losses, lead to people walking away from homes and causing a flood of foreclosures.

However, that is NOT the market we are in now. In fact, we now have a shortage of homes to buy and investors are struggling trying to find deals that they can buy at wholesale prices, fix up and sell for profit – without getting stuck in bidding wars. We are now in a tough to buy and easy to sell market. Strategies have changed dramatically in just the last few months!

Now with the home prices rising, many homeowners have equity in their home – to the tune of 850,000 homes with equity in the last quarter alone.  These homeowners are motivated to try and keep their home (if they can) or sell it and put some money in the bank. This trend also relates to our dropping foreclosure numbers. This is all great news for our housing market and economy.

CoreLogic also reported that IF PRICES INCREASE AN ADDITIONAL 5%, 1.6 MILLION HOMES WOULD REGAIN POSITIVE EQUITY. This is great news for investors, as I’m seeing this first hand on my searches for preforeclosure home leads… they are increasing daily. More leads than I’ve seen since 2005. This is a great time to find opportunities that your competition is missing!

You can learn more about exactly how to find, fund and close wholesale foreclosure deals, directly with these motivated homeowners in the pre-foreclosure stage, without using any of your own cash or credit, in my upcoming Live, Free Webinar “PreForeclosure Investors: Make Fast Profits Now“. If you have not registered yet, make sure you do so asap, as we fill up quickly.

Registration on your right or HERE. Talk to you this Wednesday (6pm PDT, 9pm EST)!

Read more about PreForeclosure Homes:

• Pre-Foreclosure Home Owners: Door Knocking vs. Phone Calling?
• PreForeclosure Home Owners: Prospecting the Right Way
• How To Get Comfortable With PreForeclosures Homes