U.S. home equity level are gaining at fastest rate in 60 years
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]