The number of homes worth less than their mortgage crept up in the fourth quarter of 2018, according to the housing data company CoreLogic. While this was the first quarterly increase in negative equity since 2015, the number of underwater residences was still down on an annual basis.

In its Home Equity Report for the fourth quarter of 2018, CoreLogic found that the average homeowner with a mortgage saw their home equity increase 8.1 percent from the previous year. This resulted in an aggregate increase of $678.4 billion nationwide in wealth secured by the value of residential property.

The average homeowner realized an additional $9,700 in equity compared to the fourth quarter of 2017. Equity gains were strongest in the West, with Nevada homeowners seeing a typical year-over-year equity gain of $29,400.

Hawaii homeowners had an average equity gain of $26,900, while in Idaho the typical increase was $24,700. Rhode Island was one of the 10 states with the highest average equity gain, with the typical homeowner seeing a year-over-year gain of about $16,000.

Conversely, the average homeowner in North Dakota lost about $10,000 in equity. Homeowners in Louisiana lost $3,000 in equity on average, while the typical Connecticut homeowner experienced neither a gain nor a loss in equity.

Negative equity, where the amount of the loans secured by a property is greater than the home's estimated market value, affected about 2.2 million homes in the fourth quarter of 2018 – 4.2 percent of all mortgaged properties. This marked a 1.6 percent increase from the third quarter of the year.

However, the negative equity share was still down 14 percent from the fourth quarter of 2017. Approximately 364,000 homes escaped negative equity during the course of the year through regular mortgage payments, increasing home values, or a combination of both.

Frank Nothaft, chief economist at CoreLogic, says he expects more properties to regain equity this year due to a continuing trend of rising home prices. The company's Home Price Index predicts that the typical home price will increase 4.5 percent by the end of 2019.

"If all homes experience this gain, this would lift about 350,000 homeowners from being underwater and restore positive equity," said Nothaft.

The aggregate value of negative equity in the United States stood at $300.3 billion. This was up from $282.9 billion at the end of the third quarter and $283.1 billion at the end of the fourth quarter of 2017.

The negative equity share was highest in Louisiana, where 10.9 percent of mortgaged homes were worth less than their market value. Among the 10 largest metro areas analyzed by CoreLogic, the negative equity share was highest in Miami. A total of 10.4 percent of mortgaged homes in the city were underwater.

Connecticut had the nation's second highest negative equity share at 8.8 percent. This was followed by 7.8 percent in Illinois and 6.6 percent in both Maryland and New Jersey.

Washington had the lowest negative equity share at 1.5 percent. This was followed by 1.6 percent in Oregon and Utah and 1.7 percent in Colorado, Hawaii, and Texas.

Frank Martell, president and CEO of CoreLogic, said the increase in home equity has provided many homeowners with a source of funds to complete repairs, upgrades, or remodeling projects at their property.

"With rates still ultra-low by historical standards, home equity loans provide a low-cost method to finance home improvement spending," said Martell. "These expenditures are expected to rise 5 percent in 2019."

CoreLogic's says mortgaged homes account for approximately 63 percent of all residences in the United States. Its equity reports use publicly recorded deeds to analyze more than 50 million homes with open mortgages each quarter.

The reports usually differ significantly from similar quarterly reports by housing data company ATTOM Data Solutions, which uses a database of more than 155 million properties. In its fourth quarter report, ATTOM Data Solutions concluded that 25.6 percent of mortgaged properties in the U.S. were "equity-rich," or secured by loans that were 50 percent or less of the home's estimated market value, while 8.8 percent were "seriously underwater," with the value of these loans worth 125 percent or more of the estimated market value.