Monday, June 13, 2011
Like a sandcastle at high tide, equity in the American housing market has swiftly eroded in very little time.
Ten years ago, the average homeowner had 61% equity. Today, the percentage has plummeted to 38%. If this trend continues, 2011 will set the record since such records began being calculated in 1945.
Millions of Americans are struggling to keep up with mortgage payments, and even those making their payments are losing equity because home values continue to decline. About 23% of all mortgage holders are “under water,” meaning they owe more on their homes than they are worth.
The Federal Reserve has estimated that the value of American homes fell $339 billion in the first quarter of this year, to $16.1 trillion. Even worse is the fact that the value of household real estate fell by $6.6 trillion in just the last four years.
-Noel Brinkerhoff
Americans' Equity in Their Homes Near a Record Low (by Derek Kravitz and Christopher S. Rugaber, Associated Press)
Home Value Destroyed Since Peak: $6,600,000,000,000 (by Bill McBride, Business Insider)
Owners' Equity in Household Real Estate, 1945-2007 (Investment News)
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