Homeowners Ready to Spend on Renovations in 2015

The home improvement industry continues to regain strength as many homeowners are looking to complete home remodeling or maintenance projects this year. In fact, more than half of homeowners (57 percent) plan to spend money on home improvement projects, according to an annual survey by LightStream, an online lending division of SunTrust Banks, Inc. (NYSE: STI), conducted online by Harris Poll among homeowners.

Homeowners planning renovations this yearThe most popular projects will focus on the outdoors, with 43 percent investing in improvements including decks, patios, or landscape remodels. Bathroom remodels (29 percent) and kitchen remodels (26 percent) also remain popular.

 
 
 

SunTrust 2015 Home Improvement Survey Infographic

Updating a home's look, features and technology are driving 52 percent of renovation plans, followed closely by repairs (49 percent). Interestingly, family needs across generations are also motivating change: five percent say they are remodeling to suit a growing family and three percent are accommodating aging parents.

But just how much are homeowners willing to spend on enhancements? More than one third (36 percent) plan to invest $5,000 or more, with a solid 18 percent spending more than$10,000.

When it comes to paying for these projects, more than half of homeowners say they will tap savings (59 percent). Many plan to use credit cards (30 percent). Seven percent will look to secure a home improvement loan. Home equity lines of credit are also cited as a financing option (9 percent).

"With the economy improving, more and more homeowners are deciding to move forward on remodeling projects," said Todd Nelson, business development officer at LightStream. "Taking the time to consider various financing options such as a home equity loan or personal loan can help make their investments go even further, particularly with today's low interest rates. For people without equity to leverage, an unsecured home improvement loan can be a great solution." According to the second quarter 2014 Zillow Negative Equity Report, nearly 35 percent of homeowners do not have sufficient equity in their homes to leverage.

Some homeowners, even when using savings, choose to finance part of their renovations if it makes financial sense. Like four percent of those surveyed who are planning pools this year, Michael and Michelle Flick had long anticipated enhancing their backyard and had saved for a pool. They planned to add an enclosure as a "phase two project," once they rebuilt their savings. 

"We're conservative when it comes to finances and didn't want to take on a lot of debt, but there were cost savings to doing all the construction at the same time," said Flick. "We researched our options and applied for a home improvement loan from LightStream. The rate was really competitive and having the loan proceeds in our bank account gave us great control throughout the construction process."

"Whether to improve indoor and outdoor space for a better family life or to perform routine maintenance, renovations provide myriad benefits," added Nelson. "Consumers are increasingly putting money back into their homes. This is good for the economy and the home improvement industry overall."

CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled services provider, today released its January 2015 CoreLogic Home Price Index (HPI®) which shows that home prices nationwide, including distressed sales, increased 5.7 percent in January 2015 compared to January 2014. This change represents 35 months of consecutive year-over-year increases in home prices nationally. On a month-over-month basis, home prices nationwide, including distressed sales, increased by 1.1 percent in January 2015 compared to December 2014.*

Including distressed sales, 27 states and the District of Columbia are at or within 10 percent of their peak. Four states, New York (+5.6), Wyoming (+8.3 percent), Texas (+8.3 percent) and Colorado (+9.1 percent), reached new highs in the home price index since January 1976 when the index starts.

Excluding distressed sales, home prices increased 5.6 percent in January 2015 compared to January 2014 and increased 1.4 percent month over month compared to December 2014. Also excluding distressed sales, all states and the District of Columbia showed year-over-year home price appreciation in January. Distressed sales include short sales and real estate owned (REO) transactions.

The CoreLogic HPI Forecast indicates that home prices, including distressed sales, are projected to increase 0.4 percent month over month from January 2015 to February 2015 and, on a year-over-year basis, by 5.3 percent** from January 2015 to January 2016. Excluding distressed sales, home prices are expected to increase 0.3 percent month over month from January 2015 to February 2015 and by 4.9 percent** year over year from January 2015 to January 2016. The CoreLogic HPI Forecast is a monthly projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“House price appreciation has generally been stronger in the western half of the nation and weakest in the mid-Atlantic and northeast states,” said Dr. Frank Nothaft, chief economist at CoreLogic. “In part, these trends reflect the strength of regional economies. Colorado and Texas have had stronger job creation and have seen 8 to 9 percent price gains over the past 12 months in our combined indexes. In contrast, values were flat or down in Connecticut, Delaware and Maryland in our overall index, including distressed sales.”

“We continue to see a strong and progressive uptick in home prices as we enter 2015. We project home prices will continue to rise throughout the year and into 2016,” said Anand Nallathambi, president and CEO of CoreLogic. “A dearth of supply in many parts of the country is a big factor driving up prices. Many homeowners have taken advantage of low rates to refinance their homes, and until we see sustained increases in income levels and employment they are hunkered down so supplies may remain tight. Demand has picked up as low mortgage rates and the cut in FHA's annual insurance premium reduce monthly payments for prospective homebuyers.”

Highlights as of January 2015:

• Including distressed sales, the five states with the highest home price appreciation were Colorado (+9.1 percent), Michigan (+9.0 percent), Texas (+8.3 percent), Wyoming (+8.3 percent) and Nevada (+7.6 percent).
• Excluding distressed sales, the five states with the highest home price appreciation were Colorado (+8.1 percent), Nevada (+7.9 percent), Texas (+7.8 percent), Massachusetts (+7.7 percent), and Oregon (+7.4 percent).
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to January 2015) was -12.7 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -8.6 percent.
• Including distressed sales, only Maryland and Connecticut showed negative home price appreciation at -0.3 percent and -1.9 percent respectively. The five states with the largest peak-to-current declines, including distressed transactions, were Nevada (-35.3 percent), Florida (-32.6 percent), Rhode Island (-29.9 percent), Arizona (-28.6 percent) and Connecticut (-24.8 percent).
• Including distressed sales, the U.S. has experienced 35 consecutive months of year-over-year increases; however, the national increase is no longer posting double-digits.
• Ninety-four of the top 100 Core Based Statistical Areas (CBSAs) measured by population showed year-over-year increases in January 2015. The six CBSAs that showed year-over-year declines were New Orleans-Metairie, LA; Bridgeport-Stamford-Norwalk, CT; Rochester, NY; Baltimore-Columbia-Towson, MD; Wilmington, DE-MD-NJ; and Hartford-West Hartford- East Hartford, CT.

*December data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.

** The forecast accuracy represents a 95-percent statistical confidence interval with a +/- 2.0 percent margin of error for the index including distressed sales and a +/- 1.9 percent margin of error for the index excluding distressed sales.

CoreLogic Reports 312,000 Residential Properties Regained Equity in Q1 2014

Year Over Year, the Negative Equity Share Has Dropped from 9.8M to 6.3M Properties

IRVINE, Calif. — CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled services provider, today released new analysis showing more than 300,000 homes returned to positive equity in the first quarter of 2014, bringing the total number of mortgaged residential properties with equity to more than 43 million. The CoreLogic analysis indicates that approximately 6.3 million homes, or 12.7 percent of all residential properties with a mortgage, were still in negative equity as of Q1 2014 compared to 6.6 million homes, or 13.4 percent for Q4 2013*. As a year-over-year comparison, the negative equity share was 20.2 percent, or 9.8 million homes, in Q1 2013.

Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

For the homes in negative equity status, the national aggregate value of negative equity was $383.7 billion at the end of Q1 2014, down $16.9 billion from approximately $400 billion in the fourth quarter 2013.

Of the 43 million residential properties with equity, approximately 10 million have less than 20-percent equity. Borrowers with less than 20-percent equity, referred to as “under-equitied,” may have a more difficult time refinancing their existing home or obtaining new financing to sell and buy another home due to underwriting constraints. Under-equitied mortgages accounted for 20.6 percent of all residential properties with a mortgage nationwide in Q1 2014, with more than 1.5 million residential properties at less than 5-percent equity, referred to as near-negative equity. Properties that are near-negative equity are considered at risk if home prices fall.

“Despite the massive improvement in prices and reduction in negative equity over the last few years, many borrowers still lack sufficient equity to move and purchase a home,” said Sam Khater, deputy chief economist for CoreLogic. “One in five borrowers have less than 10 percent equity in their property, which is not enough to cover the down payment and additional costs associated with a conventional mortgage.”

“Prices continue to rise across most of the country and significantly fewer borrowers are underwater today compared to last year,” said Anand Nallathambi, president and CEO of CoreLogic. “An additional rise in home prices of 5 percent, which we are projecting will occur over the next 12 months, will lift another 1.2 million properties out of the negative equity trap.”

Highlights as of Q1 2014:

• Nevada had the highest percentage of mortgaged properties in negative equity at 29.4 percent, followed by Florida (26.9 percent), Mississippi (20.1 percent), Arizona (20.1 percent) and Illinois (19.7 percent). These top five states combined account for 31.1 percent of negative equity in the United States.
• Of the 25 largest Core Based Statistical Areas (CBSAs) based on population, Tampa-St. Petersburg-Clearwater, Fla., had the highest percentage of mortgaged properties in negative equity at 29.5 percent, followed by Chicago-Naperville-Arlington Heights, Ill. (22.4 percent), Phoenix-Mesa-Scottsdale, Ariz. (20.6 percent), Atlanta-Sandy Springs-Roswell, Ga. (19.5 percent) and Warren-Troy-Farmington Hills, Mich. (18.3 percent).
• Of the total $384 billion in negative equity, first liens without home equity loans accounted for $200 billion aggregate negative equity, while first liens with home equity loans accounted for $184 billion.
• Approximately 3.8 million underwater borrowers hold first liens without home equity loans. The average mortgage balance for this group of borrowers is $218,000. The average underwater amount is $52,000.
• Approximately 2.5 million underwater borrowers hold both first and second liens. The average mortgage balance for this group of borrowers is $290,000. The average underwater amount is $75,000.
• Texas had the highest percentage of mortgaged residential properties in an equity position at 96.7 percent, followed by Montana (96.3 percent), Alaska (95.7 percent), North Dakota (95.7 percent) and Hawaii (95.6 percent).
• Of the largest 25 Core Based Statistical Areas (CBSAs) based on population, Houston-The Woodlands-Sugar Land, Texas had the highest percentage of mortgaged properties in an equity position at 97.0 percent; followed by Dallas-Plano-Irving, Texas (96.2 percent); Anaheim-Santa Ana-Irvine, Calif. (95.6 percent); Portland-Vancouver-Hillsboro, Ore. (94.8 percent) and Seattle-Bellevue-Everett, Wash. (93.7 percent).
• Nationally, the number of homes with equity had a default rate of 0.6 percent, the same as in the previous quarter. However, homes with negative equity had a default rate of 3.5 percent as of Q1 2014, down from 3.7 percent in Q4 2013.
• The bulk of home equity for mortgaged properties is concentrated at the high end of the housing market. For example, 93 percent of homes valued at greater than $200,000 have equity compared with 82 percent of homes valued at less than $200,000.

CORELOGIC REPORTS 4 MILLION RESIDENTIAL PROPERTIES RETURNED TO POSITIVE EQUITY IN 2013

About 6.5 Million Residential Properties with a Mortgage Still in Negative Equity

IRVINE, Calif.,  — CoreLogic® (NYSE: CLGX), a leading residential property information, analytics and services provider, today released new analysis showing 4 million homes returned to positive equity in 2013, bringing the total number of mortgaged residential properties with equity to 42.7 million. The CoreLogic analysis indicates that nearly 6.5 million homes, or 13.3 percent of all residential properties with a mortgage, were still in negative equity at the end of 2013. Due to a small slowdown in the quarterly growth rate of the Home Price Index, the negative equity share was virtually unchanged from the third quarter of 2013.*

Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

For the homes in negative equity status, the national aggregate value of negative equity was $398.4 billion for fourth quarter 2013, compared to $401.3 billion for third quarter 2013, a decrease of $2.9 billion.

Of the 42.7 million residential properties with positive equity, 10 million have less than 20-percent equity. Borrowers with less than 20-percent equity, referred to as “under-equitied,” may have a more difficult time obtaining new financing for their homes due to underwriting constraints. Under-equitied mortgages accounted for 21.1 percent of all residential properties with a mortgage nationwide in 2013, with more than 1.6 million residential properties at less than 5-percent equity, referred to as near-negative equity. Properties that are near-negative equity are considered at risk if home prices fall.

“The plight of the underwater borrower has improved dramatically since negative equity peaked in December 2009 when more than 12 million mortgaged homeowners were underwater,” said Mark Fleming, chief economist for CoreLogic. “Over the past four years, more than 5.5 million homeowners have regained equity, reducing their risk of foreclosure and unlocking pent-up supply in the housing market.”

“Stability and growth in the housing market are essential for a durable recovery of the U.S. economy,” said Anand Nallathambi, president and CEO of CoreLogic. “The rebound in home prices in 2013 helped 4 million property owners regain at least some positive equity in their largest asset—their home. We still have a long way to go to eliminate the negative equity overhang but significant progress is being made every day across most of the country.”

Highlights as of Q4 2013:

• Nevada had the highest percentage of mortgaged properties in negative equity at 30.4 percent, followed by Florida (28.1 percent), Arizona (21.5 percent), Ohio (19.0 percent) and Illinois (18.7 percent). These top five states combined account for 36.9 percent of negative equity in the United States.
• Of the 25 largest Core Based Statistical Areas (CBSAs) based on population, Orlando-Kissimmee-Sanford, Fla., had the highest percentage of mortgaged properties in negative equity at 31.5 percent, followed by Tampa-St. Petersburg-Clearwater, Fla. (30.4 percent), Phoenix-Mesa-Scottsdale, Ariz. (22.1 percent), Chicago-Naperville-Arlington Heights, Ill. (21.4 percent) and Atlanta-Sandy Springs-Roswell, Ga. (19.9 percent).
• Of the total $398 billion in negative equity, first liens without home equity loans accounted for $205 billion aggregate negative equity, while first liens with home equity loans accounted for $193 billion.
• Approximately 3.9 million upside-down borrowers hold first liens without home equity loans. The average mortgage balance for this group of borrowers is $219,000. The average underwater amount is $52,000.
• Approximately 2.6 million upside-down borrowers hold both first and second liens. The average mortgage balance for this group of borrowers is $293,000.The average underwater amount is $75,000.
• The bulk of home equity for mortgaged properties is concentrated at the high end of the housing market. For example, 92 percent of homes valued at greater than $200,000 have equity compared with 81 percent of homes valued at less than $200,000.

rvine, Calif., — CoreLogic® (NYSE: CLGX), a leading residential property information, analytics and services provider, today released its January CoreLogic Home Price Index (HPI®) report. Home prices nationwide, including distressed sales, increased 12 percent in January 2014 compared to January 2013. This change represents 23 months of consecutive year-over-year increases in home prices nationally. On a month-over-month basis, home prices nationwide, including distressed sales, increased by 0.9 percent in January 2014 compared to December 2013.*

At the state level, including distressed sales, Louisiana, Nebraska and Texas surpassed their previous home price peaks in January 2014. In all, 22 states and the District of Columbia are at or within 10 percent of their peak home price appreciation. Additionally, over the past year, seven states equaled or grew faster than the nation as a whole, including Nevada, California, Oregon, Michigan, Georgia, Arizona and Florida.

Excluding distressed sales, home prices nationally increased 9.8 percent in January 2014 compared to January 2013 and 0.7 percent month over month compared to December 2013.  Distressed sales include short sales and real estate owned (REO) transactions.

The CoreLogic Pending HPI indicates that February 2014 home prices, including distressed sales, are projected to increase 12.5 percent year over year from February 2013. On a month-over-month basis, home prices are expected to increase 0.7 percent from January 2014 to February 2014. Excluding distressed sales, February 2014 home prices are poised to rise 10.4 percent year over year from February 2013 and 1.1 percent month over month from January 2014. The CoreLogic Pending HPI is a proprietary and exclusive metric that provides the most current indication of trends in home prices. It is based on Multiple Listing Service (MLS) data that measures price changes for the most recent month.

“Polar vortices and a string of snow storms did not manage to weaken house price appreciation in January,” said Dr. Mark Fleming, chief economist for CoreLogic. “The last time January month-over-month and year-over-year price appreciation was this strong was at the height of the housing bubble in 2006.”

“Home prices continued to march higher in January and we expect to see more increases as the market comes out of hibernation for the spring buying season,” said Anand Nallathambi, president and CEO of CoreLogic. “Excluding distressed sales, all 50 states and the District of Columbia showed year-over-year home price appreciation for January.”

Highlights as of January 2014:

• Including distressed sales, the five states with the highest home price appreciation were Nevada (+22.2 percent), California (+20.3 percent), Oregon (+14.3 percent), Michigan (+13.7 percent) and Georgia (+13.4 percent).
• Including distressed sales, only Mississippi (-0.3 percent) posted home price depreciation in January 2014.
• Excluding distressed sales, the five states with the highest home price appreciation were Nevada (+17.2 percent), California (+16.0 percent), Florida (+12.7 percent), Arizona (+11.5 percent) and Oregon (+11.4 percent).
• Excluding distressed sales, no states posted home price depreciation in January.
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to January 2014) was -17.3 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -13.3 percent.
• The five states with the largest peak-to-current declines, including distressed transactions, were Nevada (-40.1 percent), Florida (-36.4 percent), Arizona (-30.8 percent), Rhode Island (-30.5 percent) and West Virginia (-28.9 percent).
• Ninety-seven of the top 100 Core Based Statistical Areas** (CBSAs) measured by population showed year-over-year increases in January 2014. The three CBSAs that did not show an increase were New Haven-Milford, CT, Philadelphia, PA. and Rochester, NY.