According to the CoreLogic Home Equity Report, aggregate home equity during the first quarter of 2013 surpassed $4.2 billion, a 9% increase from the previous quarter. Home equity is used to accurately predict default rates.

The changes in home equity have led to a major boost in consumer confidence and spending. Consumers are finding out about how home prices are increasing drastically in metropolitan areas, but they are also slowly increasing in local areas and suburbs as well.

During the housing bubble, homeowners were satisfied with increasing house prices, which in turn allowed them to use their equity towards cash-out refinances and monetary consumption.  Houses were almost being used like ATMs for the home owners.

Once the housing bubble burst, homeowners found themselves with negative equity which has led to large debt and slowed consumer spending as well as negative impact on labor mobility, which hurts the economy.

With home equity increasing during the first three months of this year, the number of homes with negative equity fell to 9.7 million. If housing prices were to increase another 5%, according to CoreLogic, 1.6 million homes would attain positive equity.