Home Equity Skyrockets

The Federal Reserve’s Board of Governors recently released a report showing just how much rising prices have helped current homeowners. Homeowners’ real estate wealth is increasing at a staggering pace.

-Household equity in real estate jumped $1.4 trillion in Q1, to $27.8 trillion in total equity

-Overall mortgage debt grew much slower, increasing just $240B in Q1 to $12.8 trillion. This reflects how existing homeowners can roll their home sale profits into their new purchase, reducing their overall mortgage debt.

Our take

More equity than ever means homeowners have more money than ever. That’s incredibly great news because it shows how this market is nothing like the market before the ‘08 crisis. People have a lot of cash they can tap into when needed, which means homebuying budgets will remain strong. To us, this shows that the market will bounce back quickly with very few foreclosures nationwide.

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