Homeowners' equity reaches highest level in four years
CoreLogic previously reported that as of the second quarter, improving equity helped the number of underwater homeowners fall to 10,779,000, a 5.2 percent decline from the first quarter and 8.1 percent less than a year ago. About 22.3 percent of all homes with mortgage owed more on their homes than those properties are worth. That was an improvement from the first quarter, when there were about 11.4 million underwater homes, amounting to about 23.7% of all mortgaged homes. The number of underwater homeowners in the third quarter has not yet been reported.
The value of real estate owned by households increased about $370 billion over the second quarter as more and more markets reported improving home values. The Federal Housing Finance Administration reported earlier that home prices through the third quarter are rising at an annualized rate of 4.34 percent and rose 1.08 percent over the second quarter.
Total household net worth-the difference between the value of households’ assets and liabilities-was about $64.8 trillion at the end of the third quarter of 2012, $1.7 trillion more than at the end of the second quarter. Household debt decreased at an annual rate of 2 percent in the third quarter. Home mortgage debt contracted 3 percent, continuing the downtrend that commenced in early 2008. Consumer credit rose at an annual rate of 4 ¼ percent, the eighth consecutive quarterly increase.
Homeowners’ equity reached $7714.3 billion, a 5.2 percent increase over the second quarter and an 18 percent increase over the level of $6526.9 in the third quarter of 20011. In 2007, homeowners’ equity reached $1.02 trillion, but fell to $7050.9 billion in 2008, according to the quarterly Federal Reserve Flow of Funds report.
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