Homeowner equity grows at fastest rate in 60 years

New York /
Jun.June 14, 2012 09:30 AM

Record-low mortgage rates have helped boost nationwide home equity levels to their highest point since the third quarter of 2008, Bloomberg News reported. Homeowner equity was 41 percent of U.S. residential property value in the first quarter, and it rose faster in the last quarter than it has at any point in the last 60 years.

The gain can be attributed to a combination of falling home prices, stricter lending standards and homeowners putting more down on their homes in an effort to refinance, according to Bloomberg. Residential mortgage debt has fallen 7 percent from its 2006 peak of $10.6 trillion, and the value of properties has decreased 23 percent in that time.

Other factors helping homeowner equity levels are the slow yields in the stock market, which have more borrowers putting money into their mortgages, the increased desire for home security amid falling national income gains and borrowers increasingly opting for shorter-term loans. The average mortgage term fell to 27 years in April compared to 29 years in February as more borrowers opt for 15-year loans. [Bloomberg]


Related Articles

arrow_forward_ios
(iStock/Illustration by Kevin Rebong for The Real Deal)
Watchdog org: Put home-sale commissions in buyers’ hands
Watchdog org: Put home-sale commissions in buyers’ hands
(iStock)
Rents in New York and South Florida metros surged more than 30%, led nationwide rise
Rents in New York and South Florida metros surged more than 30%, led nationwide rise
Princeton proud: Eric Schmidt reportedly bidding to save club
Princeton proud: Eric Schmidt reportedly bidding to save club
Princeton proud: Eric Schmidt reportedly bidding to save club
Fannie, Freddie to buy mortgages up to nearly $1M
Fannie, Freddie to buy mortgages up to nearly $1M
Fannie, Freddie to buy mortgages up to nearly $1M
Capital pains: How lenders are getting creative to get paid
Capital pains: How lenders are getting creative to get paid
Capital pains: How lenders are getting creative to get paid
(iStock)
Refinancing has saved homeowners billions, but window is closing
Refinancing has saved homeowners billions, but window is closing
RIP: Zombie homes on the decline
RIP: Zombie homes on the decline
RIP: Zombie homes on the decline
NY seeks $540M in mortgage aid. Homeowners need $6B
NY seeks $540M in mortgage aid. Homeowners need $6B
NY seeks $540M in mortgage aid. Homeowners need $6B
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...