CoreLogic, a leading global property information, analytics and data-enabled solutions provider, released a new analysis showing that U.S. homeowners with mortgages (roughly 63 percent of all homeowners) saw their equity increase by a total of $227 billion in Q3 2016 compared with the previous quarter, an increase of 3.1 percent. Additionally, 384,000 borrowers moved out of negative equity, increasing the percentage of homes with positive equity to 93.7 percent of all mortgaged properties, or approximately 47.9 million homes. Year over year, home equity grew by $726 billion, representing an increase of 10.8 percent in Q3 2016 compared with Q3 2015.

In Q3 2016, the total number of mortgaged residential properties with negative equity stood at 3.2 million, or 6.3 percent of all homes with a mortgage. This is a decrease of 10.7 percent quarter over quarter from 3.6 million homes, or 7.1 percent of mortgaged properties, in Q2 2016 and a decrease of 24.1 percent year over year from 4.2 million homes, or 8.4 percent of mortgaged properties, in Q3 2015.

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

Negative equity peaked at 26 percent of mortgaged residential properties in Q4 2009, based on CoreLogic negative equity data, which goes back to Q3 2009.

The national aggregate value of negative equity was about $282 billion at the end of Q3 2016, decreasing approximately $2.1 billion, or 0.8 percent, from $284 billion in Q2 2016, and decreasing year over year about $25 billion, or 8.2 percent, from nearly $307 billion in Q3 2015.

“Home equity rose by $12,500 for the average homeowner over the last four quarters,” said Dr. Frank Nothaft, chief economist for CoreLogic. “There was wide geographic variation with homeowners in California, Oregon and Washington gaining an average of at least $25,000 in home equity wealth, while owners in Alaska, North Dakota and Connecticut had small declines, on average.”

“Price appreciation is the main ingredient for home equity wealth creation, and home prices rose 5.8 percent in the year ending September 2016 according to the CoreLogic Home Price Index,” said Anand Nallathambi, president and CEO of CoreLogic. “Paydown of principal is the second key component of equity building. Many homeowners have refinanced into shorter-term loans, such as a 15-year loan, and by doing so, they have significantly fewer mortgage payments and are able to build equity wealth faster.”

Highlights as of Q3 2016:

• Texas had the highest percentage of homes with positive equity at 98.4 percent, followed by Alaska (98.1 percent), Colorado (97.9 percent), Utah (97.9 percent) and Washington (97.9 percent).

• On average, homeowner equity increased about $13,000, from Q3 2015 to Q3 2016 (for mortgaged properties). California, Oregon and Washington had increases of $25,000 to $30,000, while Alaska, Connecticut, and North Dakota experienced small declines.

• Nevada had the highest percentage of mortgaged properties in negative equity at 14.2 percent, followed by Florida (12.5 percent), Illinois (10.6 percent), Arizona (10.6 percent) and Rhode Island (10 percent). These top five states combined accounted for 30.6 percent of negative equity mortgages in the U.S., but only 16.3 percent of outstanding mortgages.

• Of the 10 largest metropolitan areas by population, San Francisco-Redwood City-South San Francisco, CA had the highest percentage of mortgaged properties in a positive equity position at 99.4 percent, followed by Houston-The Woodlands-Sugar Land, TX (98.5 percent), Denver-Aurora-Lakewood, CO (98.4 percent), Los Angeles-Long Beach-Glendale, CA (96.9 percent) and Boston, MA (95.3 percent).

• Of the same 10 largest metropolitan areas, Miami-Miami Beach-Kendall, FL had the highest percentage of mortgaged properties in negative equity at 17 percent, followed by Las Vegas-Henderson-Paradise, NV (16.2 percent), Chicago-Naperville-Arlington Heights, IL (12.2 percent), Washington-Arlington-Alexandria, DC-VA-MD-WV (8.7 percent) and New York-Jersey City-White Plains, NY-NJ (5.1 percent).

• The bulk of home equity for mortgaged properties is concentrated at the high end of the housing market. For example, 96 percent of homes valued at greater than $200,000 have equity compared with 90 percent of homes valued at less than $200,000.