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96 The Big Finish Wrap your head around the market's leading indicators. 96 96 As of the first quarter of 2022, the changes in negative equity are: QUARTERLY CHANGE: FROM THE FOURTH QUARTER OF 2021 TO THE FIRST QUARTER OF 2022, THE TOTAL NUMBER OF MORTGAGED HOMES IN NEGATIVE EQUITY DECREASED BY 5.3% TO 1.1 MILLION HOMES, OR 2% OF ALL MORTGAGED PROPERTIES. ANNUAL CHANGE: IN THE FIRST QUARTER OF 2021, 1.4 MILLION HOMES, OR 2.6% OF ALL MORTGAGED PROPERTIES, WERE IN NEGATIVE EQUITY. THIS NUMBER DECREASED BY 23%, OR APPROXIMATELY 300,000 PROPERTIES, IN THE FIRST QUARTER OF 2022. HOMEOWNERS GAINED 3.8T IN EQUITY Q1 As home prices continue to reach new highs, the nation also experienced "the largest one- year gain in average home equity wealth for owners." CoreLogic's latest report covering aspects of the first quarter of the year is the Homeowner Equity Report which showed that U.S. homeowners with mortgages have seen their equity increase by 32.2% year over year, representing a collective equity gain of $3.8 trillion, which averages out to $63,600 per borrower since the first quarter of 2021. Home prices have done nothing but rise during the first quarter of 2022, with growth eclipsing the 20% mark, allowing 62,000 additional owners to regain equity compared with the previous quarter. Homeowners in the higher cost areas of California, Hawaii, and Washington led the country for annual equity increases with all gaining more than $100,000 of equity per borrower. Only 2% of homeowners with a mortgage remain underwater, a slight decline from the fourth quarter of 2021. "Price growth is the key ingredient for the creation of home equity wealth," said Patrick Dodd, President and CEO at CoreLogic. "Home prices were up by 20% in March compared to one year earlier in CoreLogic's national Home Price Index. is has led to the largest one-year gain in average home equity wealth for owners and is expected to spur a record amount of home-improvement spending this year." Negative equity, otherwise known as underwater mortgages, applies to borrowers who may owe more on their mortgages than their homes are currently worth. "Because home equity is affected by home price changes, borrowers with equity positions near (+/- 5%) the negative equity cutoff are most likely to move out of or into negative equity as prices change, respectively," CoreLogic concluded. "Looking at the first quarter of 2022 book of mortgages, if home prices increase by 5%, 130,000 homes would regain equity; if home prices decline by 5%, 167,000 properties would fall underwater."