Home equity in US hits record $27.8 trillion

[brooklynite]

Source: The Hill

Total U.S. home equity reached a record high of $27.8 trillion, according to the Federal Reserve.

The ​​Fed reported that home equity increased by almost 20 percent in the first quarter of the year amid a booming housing market, The Wall Street Journal said.

The record setting home equity figures come as housing market prices skyrocket. The surge in prices coupled with high inflation rates has made it more difficult for people to use their equity, but on the other hand, it has bolstered the finances of Americans who already own houses, the newspaper added.

Recent research from Freddie Mac, the federal home loan mortgage corporation, indicated that low mortgage rates, limited supply and increased migration to the South and West as people seek more space have all contributed to the rising prices of homes.

Read more: https://thehill.com/policy/finance/3525603-home-equity-in-us-hits-record-27-8-trillion/

[PoindexterOglethorpe]

1. Oh, my.

I know I keep on checking on the zillow estimates for my home, which I expect are somewhat inflated. But I am very aware that were I to sell this home I would profit quite nicely, which would help to pay for independent/assisted living, which would be the only reason I'd sell.

[LudwigPastorius]

18. The Zillow estimate on my house has gone up 53% over the past 23 months.

That's insane.

If I were thinking at all of selling, I believe I'd do it very soon.

[andym]

2. Looks like a bubble

Last edited Thu Jun 16, 2022, 11:42 AM - Edit history (1)

Up 40% in two years!
https://fred.stlouisfed.org/graph/?g=QvsU

[SouthernDem4ever]

5. For sure

and like all bubbles, they start to deflate or even burst at some point. The economy of low wage jobs won't be able to afford the rental prices.

[Polybius]

14. Why has it gone up so much since the 70's?

Looks like it exploded from 2000-2008ish, then dropped until 2013 or so, then shot up out of control. Even Covid didn't make it go down.

[melm00se]

19. Housing price/equity inflation was driven,

in part, due to the availability of cheap money:



which has driven the availability of disposable income



which contributed to the inflationary pressure.

COVID's impact was that it shrank/stagnated the supply of new homes and froze people in place so existing housing did not come onto the market.

When I sold my house, my house was the only house in my price range in my community of 10,000 or so homes in the Triangle area of NC. This supply really pushed up housing prices.

[yaesu]

3. signed papers to sell my property today so will find out, hopefully soon, how much equity I got

that is if I survive the severe weather plowing through the area now.

[NullTuples]

4. Funny, no mention of FI's & PEC's buying up homes for rental portfolios

FI = financial institutions
PEC = private equity companies

They can afford to bid against each other as the excess cost is offset by higher rents. But it squeezes individuals out and artificially boosts prices.

[melm00se]

20. until the rents

push people from one area to another.

Right now rents are not sustainable to cover the property acquisition costs.

[Javaman]

6. I think the bubble is the process of bursting

one anecdotal piece of info: my neighbors house (right next door) has been on the market now for 4 months.

it's valued at 250K. the real estate seller is asking....675K!!!

they are now trying to rent it for....6K. fat fucking chance of that happening.

I live in, what I like to call, the very last affordable area of blue collar North Austin.

last year at this time, hell yes, some moron from California would have plunked down 675K for that house.

no more.

[twodogsbarking]

8. Summed up very nicely. I think you go it right.

[imavoter]

16. I could sell my DFW area home

and make a killing, but
where could I buy?
I couldn't.
Good thing I'm not going anywhere.
The county I'm in is trying to value
my home at almost a fourth more of it's value
That's also insane.

[Sympthsical]

7. 42% increase in value in 2.5 years on mine

Because people are insane.

Doesn't matter to me if the bubble bursts, as I plan on staying for at least the next ten years.

I don't know how anyone buys in the Bay Area. We only managed because there was two of us saving up for the down payment. Single people or people in their 20s and early 30s? Newp. Enjoy your skyrocketing rents, peons.

Fun country.

[pfitz59]

9. Bought my home 20 years ago for $350K

Latest Zwillow estimate $1.5 million. A family friend bought a fixer-upper for $160k in 1970. Sold it for $8 million (location). The real surprise for most folk is Capital Gains Tax on the earned equity. Bleeds a chunk away.

[Farmer-Rick]

10. Yeah, I've been offered, several times, double the last estimate

For my farm. But, I decided to keep it for my kids. I refinanced at 2% and am now making double payments. Hopefully, I'll own it outright in 2 years.

Real estate prices go up and down, but mostly up especially if the land is global warming safe. The Smokie Mountains will soon be beach front property.

[Recursion]

11. This is why I cringe every time somebody brings up taxing unrealized capital gains

Because US homeowners are a much fatter goose than Elon Musk as far as that goes.

[Bayard]

12. So glad we were able to pay off our mortgage last year

Its a huge relief.

Just recently bought another 2 acres next to us from an Amish guy. He and I had talked about, and settled on a reasonable price. Then he got a realtor involved, and the price tripled. We ended up still buying it for the privacy and pasture, but what a ripoff.

[twodogsbarking]

13. Never trust a realtor.

[Bayard]

15. Nope

The rest of that 200 acres goes on the auction block this Sat. I asked the realtor, at our closing, if he was going to disclose to other potential buyers that parts of all this land is in a flood zone. He said, oh no--that's not going to matter to anyone And its easy to find out anyway.

It was quite a surprise to us that we had to buy flood insurance when we still had a mortgage. The realtor for this property never disclosed it either.

[LudwigPastorius]

17. Part of that is about to go bye-bye.

At least property taxes have a chance of easing when the bubble pops.