The percentage of equity Americans have in their homes slipped again during the first quarter, according to the Fed’s U.S. Flow of Funds Accounts report released today.
Homeowner’s percentage of equity fell to 46.2 percent during the first quarter, down from 47.5 percent in the fourth quarter and 49.9 percent a year earlier.
Since 2001, home equity has fallen steadily by about 10 percent from levels around 57 percent, and is now at a position not seen since the 1940s.
The total value of homeowner equity slipped to $9.12 trillion, down from $9.52 trillion in the fourth quarter and $10 trillion a year earlier.
And home equity in American homes is sure to keep falling, so long as home prices continue to fall back to earth.
In fact, a recent report from Zillow found that negative equity, in which borrowers owe more on their mortgage than the present value of their home, was as high as 95 percent in some areas (Stockton, CA).
That same report noted that roughly half of those who purchased a home when prices peaked in 2006 are now underwater, while 45 of those who bought a home last year are now upside down.
The Fed report said the growth of home mortgage debt slowed to an annual rate of three percent in the first quarter, more than 50 percent below the pace in 2007.