CoreLogic's® (NYSE: CLGX) Home Equity Report for the fourth quarter of 2018, out Thursday, shows that U.S. homeowners with mortgages (which account for roughly 63% of all properties) have seen their equity increase by 8.1% year over year, representing a gain of nearly $678.4 billion since the fourth quarter of 2017.

Additionally, the average homeowner gained $9,700 in home equity between the fourth quarter of 2017 and the fourth quarter of 2018.

While home equity grew in almost every state in the nation, western states experienced the most significant annual increases. Nevada homeowners gained an average of approximately $29,400 in home equity, while Hawaii homeowners gained an average of approximately $26,900 and Idaho homeowners gained an average of $24,700. California homeowners experienced the fourth-highest growth with an average increase of approximately $19,600 in home equity (Figure 1).

From the third quarter of 2018 to the fourth quarter of 2018, the total number of mortgaged homes in negative equity increased 1.6% to 2.2 million homes or 4.2% of all mortgaged properties. This was the first quarterly increase since the fourth quarter of 2015. Despite that quarter-over-quarter increase, on a year-over-year basis, the number of mortgaged properties in negative equity fell 14%, or by 351,000, from 2.6 million homes – or 4.9% of all mortgaged properties – in the fourth quarter of 2018.

“Our forecast for the CoreLogic Home Price Index predicts there will be a 4.5% increase in our national index from December 2018 to the end of 2019,” said Dr. Frank Nothaft, chief economist for CoreLogic. “If all homes experience this gain, this would lift about 350,000 homeowners from being underwater and restore positive equity.”

Negative equity, often referred to as being underwater or upside down, peaked at 26% of mortgaged residential properties in the fourth quarter of 2009, based on the CoreLogic equity data analysis, which began in the third quarter of 2009.

The national aggregate value of negative equity was approximately $300.3 billion at the end of the fourth quarter of 2018. This is up approximately $17.4 billion from $282.9 billion in the third quarter of 2018 and up year over year by approximately $14.4 billion from $285.9 billion in the fourth quarter of 2017.

"As home prices rise, significantly more people are choosing to remodel, repair or upgrade their existing homes. The increase in home equity over the past several years provides homeowners with the means to finance home remodels and repairs,” said Frank Martell, president and CEO of CoreLogic. “With rates still ultra-low by historical standards, home-equity loans provide a low-cost method to finance home-improvement spending. These expenditures are expected to rise 5% in 2019.”