Monday, June 9, 2008
U.S. Equity at Lowest Point in 63 Years
Mortgage debt rises in 1Q to $10.6 trillion.
The equity Americans have in their most important asset - their homes - has dropped to its lowest level since the end of World War II.
A homeowner's equity is the market value of a property minus the mortgage debt.
Homeowners' portion of equity slipped to 46.2 percent in the first quarter from a revised 47.5 percent in the previous quarter. That was the fifth consecutive quarter below the 50 percent mark, the Federal Reserve said yesterday.
The total dollar value of equity also fell for the fourth straight quarter to $9.12 trillion from $9.52 trillion in the fourth quarter, while Americans' total mortgage debt rose to $10.6 trillion from $10.53 trillion.
Homeowners' percentage of equity has declined steadily even as home values surged during the housing boom because of a jump in cash-out refinancing, home equity loans and an increase in 100 percent financing.
Read the whole sad AP/Baltimore Sun story here. And since some of our fave transplants come from NYC, see the New York Housing Bubble Blog on this topic.