Home Equity

Recently the Federal Reserve reported that homeowner's net equity holdings have increased from $5.9 trillion to $7 trillion for the time period spanning the first quarter of 2009 to the end of the second quarter 2010.

How could this be happening when many homeowners are underwater with their mortgages? Some homeowners, not most to be sure, have experienced an increase in value of their homes during this 15 month period. A few parts of California have actually seen some double digit rises in price after being hammered. Some of the increase in equity is due to homeowner improvement and some of it is due to homeowners paying down their mortgage balances.

Hopefully the housing market has bottomed out here in our area. For a variety of reasons, total household debt in our country is declining. This is good news.