Home News Here’s how much equity U.S. homeowners have lost since May

Here’s how much equity U.S. homeowners have lost since May

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Historic rise in home prices in the first two years pandemic It provided homeowners with a record amount of new home equity.

But about $1.5 trillion of that has been lost since May, according to Black Knight, a mortgage software and analytics firm. The average borrower lost $30,000 in assets.

Homeowner wealth peaked last May at a combined $17.6 trillion after home prices rose 45% since the start of the pandemic.

At the end of September, prices were still up 41% and equities were still very strong. A borrower who bought a home before the pandemic, in total, has $5 trillion more than he did before the pandemic hit. This means he has $92,000 more in assets per borrower than in February 2020.

Ben Graboske, Black Knight’s president of data and analytics, said:

But as mortgage rates rose in the spring, home prices began to fall, making it much more difficult to buy. has increased by nearly $1,000 from

In 10% of major markets, including Las Vegas, Miami, Los Angeles, Phoenix, Tampa and San Diego, homeowners must spend twice the long-term median household income to make their monthly payments. Hmm.

That’s why home sales started plummeting in May, and prices have followed suit.

September house prices fell month-on-month for the third month in a row, but not as sharply as July and August. While prices typically fall over the summer and fall due to a seasonal slowdown, 2022 saw a much steeper decline than usual.

Prices have fallen 2.6% since the end of June. This is his first three-month drop since late 2018 and the steepest drop since the financial crisis in early 2009. Since July, the median home price has fallen $11,560. However, the price is 10.7% higher than in September 2021.

As of the end of September, the amount of collective equity available to borrowers while maintaining 20% ​​equity in their homes was down $1.17 trillion from May. This is his first decline in three years of so-called tappable equity.

The percentage of borrowers who owe more on their mortgage than their home is worth is still very low at just 0.85%. But the numbers are starting to grow.

There are now less than 500,000 mortgage delinquent borrowers, but that’s still twice as many as in May. People who bought a home in the past year are at the highest risk of being submerged because they bought it during the peak of the market.

“While this is clearly a situation that requires careful and continued monitoring, given the circumstances, only 3.6% of the approximately 53 million US mortgage holders have access to a mortgage. , housing equity is less than 10%, and about half of it is in mortgages.The pandemic,” Graboske said.

This article was originally published on NBCNews.com

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