More United States borrowers got into the black in 2015 and reported having equity in some form on their home. Now, many of these buyers also have more equity in general, as home prices have improved and the housing market has recovered.
Household holdings in real estate totaled 21.825 trillion dollars in the 3rd quarter of 2015. In 2014, real estate holdings totaled 20.461 trillion. From 2014 to 2015, holdings increased by 1.365 trillion dollars.
Home mortgage debt hit 9.46 trillion dollars in the 3rd quarter. Compared to 2014, that figure rose by 0.078 trillion dollars.
The difference in holdings growth (1.365 trillion) over the mortgage debt difference (0.078 trillion) shows that households across the US have seen a rise in their home equity.
In September 2015, 91% of US homes had equity. That number should grow as home values have risen across the United States. In 2014, 89% of borrowers had equity in their home. In March of 2015, 97% of Montana borrowers had equity in their home.
Although mortgage debt did expand in 2015, that fact is not necessarily negative. Oftentimes, mortgage debt expands, not because people are falling farther into debt, but because more home buyers are taking out mortgages. A majority of US home buyers need to take out mortgages to buy a home, so expanding mortgage debt often implies a healthier, growing housing market.
Delinquent mortgages have fallen in the past couple years, supporting the idea that more buyers are entering the market. As more homeowners see their equity grow, more potential buyers will see their financial success and want to also have a part in it.
Hart Real Estate Solutions