Rise in homeowner equity continues to stabilize housing market

  • Increasing home equity will lead to increasing demand from move-up buyers.
  • Equity growth acts as a cushion against unforeseen contraction in home prices.
  • Increasing equity allows owners to spend more, potentially growing the U.S. economy.

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Every quarter, the U.S. Federal Reserve releases its report regarding the Financial Accounts of the United States. Although this is a very lengthy and detailed analysis, it does contain some interesting statistics on housing. The particular “nuggets” that I look for relate to the total value of residential real estate, mortgage debt and, rather importantly, details regarding homeowner equity.