- Housing equity rose nearly 30%, or nearly $2 trillion, over the past year as prices rose, home purchases rebounded, and mortgages outstanding continued to decline according to first quarter data from the Federal Reserve’s Flow of Funds.
- Mortgage debt outstanding fell by $200 billion while the market value of household real estate surged 11 percent, topping $18 trillion.
- The rise in the value of household real estate was anticipated as a result of increasing home prices as discussed here. In spite of the rise in house prices, the total value of household real estate remains roughly 20 percent below the peak.
- The housing market has rebounded in spite of falling mortgage debt in large part because of all-cash or high cash purchases. Jed Smith discusses the latest results from the Realtors® Confidence Index here, which show that 32 percent of recent transactions in April were all-cash purchases. This trend has been quite consistent over the last few years in spite of low mortgage rates.
- In total, home owners now have equity equal to 49 percent of the total value of household real estate compared to as little as 37 percent in the first quarter of 2009.
