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.

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.