December 17, 2018 rummy 0Comment

Back then, before the historic real estate bust in 2008, homeowners used their house as like ATMs through a method now known as “Cash-out Refinances”. This basically turned their equity into cash leaving most owners with little to no equity in their homes. When the prices started to fall, many found their houses in a negative equity situation so they stopped paying their mortgages altogether. This time around, homeowners are being careful and more responsible.

Today, the equity situation is totally different. According to a new report from ATTOM Data Solutions more than 1-in–4 homes with a mortgage have at least 50% equity. The report explains:

“…nearly 14.5 million U.S. properties were equity rich – where the combined estimated amount of loans secured by the property was 50 percent or less of the property’s estimated market value…The 14.5 million equity rich properties in Q3 2018 represented 25.7 percent of all properties with a mortgage.”
In addition, according to the U.S. Census Bureau, 30.3% of homes in the country have no mortgage on them.

Almost 50% of all homes have at least 50% equity.
If we take both numbers, the 30.3% of all homes without a mortgage and the 17.9% with at least 50% equity (25.7% of the 69.3% of homes with a mortgage), we realize that 48.2% of all homes in the country have at least 50% equity.

Unlike 2008, almost half of the homeowners in the country are sitting on massive amounts of home equity. They will not be walking away from their homes if the housing market begins to soften.

Reference: http://bit.ly/2SAvJaC

 

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