Richard Tafoya
Mar 6th, 2008, 09:50 PM
AP:
http://www.usatoday.com/money/economy/housing/2008-03-06-foreclosures_N.htm?loc=interstitialskip
Three reports out Thursday demonstrated the depth of the housing industry's weakness and pointed to more trouble ahead.
In a troubling report, the Federal Reserve said Americans' equity in their homes has fallen below 50% for the first time since 1945.
Home equity is the percentage of a home's market value minus mortgage-related debt.
The Fed's flow of funds report shows home equity slipped to a revised 49.6% in the second quarter 2007 and fell further, to 47.9%, in the fourth quarter. It marks the first time homeowners' debt on their houses exceeds their equity since the Fed started tracking the data in 1945.
The total value of equity also fell for a third straight quarter to $9.65 trillion from a downwardly revised $9.93 trillion in the third quarter.
Home equity has steadily declined even as home prices jumped earlier this decade due to a surge in cash-out refinances, home equity loans, lines of credit and an increase in 100% or more home financing.
Economists expect equity to drop even further as declining home prices eat into the value of most Americans' largest asset.
http://www.usatoday.com/money/economy/housing/2008-03-06-foreclosures_N.htm?loc=interstitialskip
Three reports out Thursday demonstrated the depth of the housing industry's weakness and pointed to more trouble ahead.
In a troubling report, the Federal Reserve said Americans' equity in their homes has fallen below 50% for the first time since 1945.
Home equity is the percentage of a home's market value minus mortgage-related debt.
The Fed's flow of funds report shows home equity slipped to a revised 49.6% in the second quarter 2007 and fell further, to 47.9%, in the fourth quarter. It marks the first time homeowners' debt on their houses exceeds their equity since the Fed started tracking the data in 1945.
The total value of equity also fell for a third straight quarter to $9.65 trillion from a downwardly revised $9.93 trillion in the third quarter.
Home equity has steadily declined even as home prices jumped earlier this decade due to a surge in cash-out refinances, home equity loans, lines of credit and an increase in 100% or more home financing.
Economists expect equity to drop even further as declining home prices eat into the value of most Americans' largest asset.