Owners of some 90 percent of mortgage properties in the U.S. now have some degree of equity in their homes.  CoreLogic said today that 273,000 properties returned to a positive equity status during the third quarter of 2014 and overall equity increased by about $800 billion compared to the third quarter of 2013.  About $44.6 million properties are now in a positive equity position.

Approximately 5.1 million homes or 10.3 percent of all homes in the U.S. with a mortgage, remained underwater at the end of the quarter, down from 5.4 million or 10.9 percent in the second quarter of the year and 6.5 million or 13.3 percent in the third quarter of 2013. 

The aggregate value of negative equity nationwide was $338 billion at the end of Q3 compared to $348.2 billion in Q2.  On a year-over-year basis, the value of negative equity declined from $403.2 billion in Q3 2013, representing a decrease of 16.2 percent in 12 months.  

However, many homeowners with equity are not yet out of the woods.  CoreLogic estimates that 1.3 million of them have less than 5 percent equity in their homes and could sink back underwater if home prices fall.  These near-negative borrowers are among about 9.4 million or 19 percent who are under-equitied, having loan-to-value rations over 80 percent.  These under-equitied borrowers could have a difficult time refinancing or buying a new home after selling the existing one because of lack of a down payment. 

"Nationally, the negative equity share is down over three percentage points over the past year. Declines were concentrated in a handful of states, such as Nevada, Georgia, Michigan and Florida," said Sam Khater, deputy chief economist for CoreLogic. "Forecasted house price appreciation of about five percent over the next year suggests that negative equity should be at about 8 percent a year from now, still above average, but approaching the pre-crisis level."

 Nevada continues to have the highest percentage of underwater homes at 25.4 percent followed by Florida (23.8 percent), Arizona (19 percent), Rhode Island (14.8 percent), and Illinois.  These top five states together account for nearly one-third of all negative equity in the United States.

CoreLogic said two states failed to report data for inclusion in the report, South Dakota and Wyoming