In just the last four years, equity for homeowners with a mortgage has nearly doubled to $6.9 trillion. The rapid increase in home equity reflects the improvement in home prices, dwindling distressed borrowers and increased principal repayment. These are all positive factors that will provide support to both household balance sheets and the overall economy.
More than 1 million homeowners have escaped the negative equity trap over the past year. We expect this positive trend to continue over the balance of 2016 and into next year as home prices continue to rise. Nationally, the CoreLogic Home Price Index was up 5.5 percent year over year through the first quarter. If home values rise another 5 percent uniformly across the U.S., the number of underwater borrowers will fall by another one million during the next year.
Of more than 50 million mortgaged residential properties in the United States at the end of the first quarter of 2016, approximately 4 million (8%) homeowners owe a mortgage amount greater than the value of the property. The percentage of underwater or negative equity properties at the end of the first quarter was lower than the total at the end of the fourth quarter (4.3 million and 8.5%).
Some 18% (approximately 9.1 million) of all mortgaged properties have positive equity of less than 20%, and 2.2% (1.1 million) had less than 5% positive equity at the end of the first quarter. The percentage of homes with less than 20% positive equity is lower than at the end of the fourth quarter of 2015, when 18.9% of all properties had positive equity below 20%. Homes with less than 5% equity are also lower, 2.2% at the end of the first quarter compared with 2.3% in the prior quarter.
The aggregate value of negative equity fell by $11.8 billion year over year in the first quarter to a nationwide total of $299.5 billion. At the end of the fourth quarter, the aggregate value of underwater property totaled $311.3 billion. The data were released Thursday by research firm CoreLogic.