Tag Archives: home equity

WASHINGTON — It’s official: The equity boom, which has added an estimated $1.6 trillion to the personal net wealth of American homeowners in the past year, has slowed dramatically. It’s not over by any means. It has just lost some of its previous pep.

In the latest quarterly data from the Federal Reserve, which tracks residential real estate, home equity holdings across the country rose by $177 billion. That sounds massive but it’s actually down significantly from the previous quarter, when equity soared by $452 billion — nudging half a trillion.

So what’s going on and how does this affect you? First, some basics. Your equity is the difference between the current resale value of your home and the mortgage debt you’ve got on it. If your house would sell this weekend for $300,000 and your mortgage balance is $150,000, you’ve got $150,000 in equity, not counting transaction costs. This is wealth stored away in your own private real estate savings account.

You can sit on it, borrow against it to finance home improvements or college tuitions, and you can factor it into your retirement plans. According to the Federal Reserve, home equity holdings in the latest quarter hit $10.84 trillion. That’s up from $6.4 trillion as recently as 2011. These are big, brain-numbing numbers no doubt, but equity is a crucially important subject for millions of people who are counting on it.

The rapid growth in equity has been powered primarily by post-recession gains in home-selling prices and by pay-downs of mortgage principal debts owed to banks. Total homeowner mortgage debt outstanding has continued to fall steadily, and is now well below what it was in 2009. Roughly one of three homes is mortgage-free, owned outright, according to industry estimates. Another approximately 11 million owners have equity stakes of at least 50 percent, reports housing data firm RealtyTrac in a study released last week.

The flip side of the upbeat equity picture is negative equity — underwater homes where debt exceeds resale value. Fifteen percent of all houses with mortgages are still in serious negative equity territory. The RealtyTrac study defines “serious” as owing at least 25 percent more on the mortgage than the resale value of the home — an outstanding unpaid balance of $375,000 or more on a $300,000 property, $500,000 or more on a $400,000 house.

Read more at: http://www.dispatch.com/content/stories/home_and_garden/2014/11/02/1-gains-in-equity-good-news-for-all.html

Disclaimer: for information and entertainment purposes only

Two statistical studies released last week offered a glimpse of where the country is in terms of homeowner equity, seven years after real estate began to tumble and crash. The first was the Federal Reserve’s quarterly “flow of funds” report. Among many other segments of the economy it toted up, the Fed found that homeowner equity has rebounded to its highest level in eight years — though it’s still not quite back to the $12 trillion it was during the hyperinflationary high point of the housing boom in 2005.

Has the value of your home increased or need a real estate appraisal?  Thinking of a home equity loan to purchase a new car, pay for college, or pay off credit cards; contact the appraisers at www.scappraisals.com for your home value questions.

The second study, from real estate analytics firm CoreLogic, focused on the flip side — the impressive shrinkage of negative equity. According to researchers, nearly 43 million owners with mortgage debt have positive equity. Roughly 6.5 million owners are still in negative equity positions, however, down from more than 10 million a year ago and 12 million in 2009.

Who are they and where are they? Not surprisingly, they are heavily concentrated in areas that saw the wildest price run-ups, the heaviest use of toxic loan products and the steepest plunges during the crash. In Nevada, 30.4 percent of all owners with mortgages are underwater. In Florida, it’s 28.1 percent. Arizona, 21.5 percent. Still, all three areas have improved sharply over the past two years.

Read entire article: http://www.miamiherald.com/2014/03/15/3995012/big-rebound-in-home-equity.html#storylink=cpy

Disclaimer: for information and entertainment purposes only

The biggest story in American real estate in 2013 hasn’t gotten the attention it deserves, so let’s shout this out: Homeowners’ net equity holdings soared $2.2 trillion from the third quarter of 2012 to the third quarter of this year, according to new data collected by the Federal Reserve.