US homeowners are sitting on $28.7 trillion of equity
US homeowners have a total home equity of $28.7 trillion, meaning an average of $334,000 of equity per owner-occupied housing unit, which could provide financial stability as savings decrease.
Posted 8/31/2023, 5:20:00 PM
businessinsider.com
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The average American now needs to spend 43% of their income to afford a home, as mortgage rates soar to their highest levels since 2000, reducing housing affordability and causing a decrease in housing supply.
US housing inventory continues to be tight, with a 9.2% decrease in the number of homes for sale compared to last year, marking the fourth consecutive month of annual declines, although total inventory has shown monthly increases and is up 19% since January.
The percentage of Americans paying $2,000 or more per month for a home mortgage has increased significantly in the past two years, with 51% of homebuyers facing these high payments in July 2023, compared to 18% in 2021, according to data from Black Knight. Additionally, nearly a quarter of homebuyers now have mortgage payments above $3,000, highlighting the unaffordability of the housing market for many Americans.
Many Americans have a significant amount of home equity that can be tapped into, with homeowners sitting on nearly $30 trillion in equity, but borrowers should carefully consider the terms, rates, and risks associated with borrowing against their homes.
The United States housing market has seen a 21 percent decline in previously occupied home sales over the past year, continuing the slowdown caused by rising interest rates, while prices continue to rise despite the decrease in sales, leading to a shortage of affordable homes and worsening home affordability for the foreseeable future.