The Federal Housing Finance Authority (FHFA) recently released data on the amount of home equity held by homeowners in the U.S.
Homeowner equity refers to the difference between a home’s current market value and the current balance of all mortgages on the home. (For example, if a home has a current value of $500,000 and a mortgage of $250,000 the owner has $250,000 of equity). Home equity is owned by the homeowner and is an important asset that can potentially be used by the homeowner to:
- Make Home Improvements;
- Payoff debt;
- Consolidate high interest debt;
- Improve financial and retirement planning;
- Invest in other assets; or
- Establish an emergency fund.
As of April 2023, over 83% of homes with mortgages had equity of 30% or more. This is the highest percentage of homes with greater than 30% equity in the past 10 years. This trend is consistent with home price appreciation during this period. A large percentage of homeowners that purchased or refinanced their home prior to July of 2022 have significant appreciation in their home.
It is noteworthy that less than .2% of all homes with mortgages have negative equity. This is the lowest level of homes with negative equity since 2013.
(Source: National Mortgage Database (NMDB) Aggregate Statistics, Federal Housing Finance Authority)
