Real Estate equity is on the mend according to new data released by the Federal Reserve. At its peak in 2005, the value of homes in the U.S. hovered around $13.1 trillion. In the aftermath of the 2008 financial crises, that number plummeted and ultimately led to more than seven million homes being lost to foreclosure. By 2011, homeowner equity had dropped to $6.4 trillion, affecting half of America’s mortgages.
The Fed now says that between 2011 and 2014, homeowner equity climbed to $11.3 trillion, putting the market on track for a full recovery by next year. This recovery is crucial in giving homeowners who had been underwater for years options previously closed off to them.
Home equity lending activity is on the rise, which include single lump-sum loans and lines of credit. Homeowners are refinancing, as mortgage rates remain low. The current no point 30-year fixed rates are averaging 4.125 percent and 15-year rates are averaging 3.25 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381–8888 and your question may be featured in an upcoming article.