Home Equity Makes Huge Leap So Far In 2012
June 28, 2012
Americans are finally beginning to see a jump in their home equity
after the nation saw much of it disappear when the housing market
collapsed almost four years ago.
In a June 7 report from the Federal Reserve, homeowners saw an
increase of more than 7 percent to their home equity lines of
credit in the first quarter of 2012, marking the first increase
since 2008. Americans now share a healthier home equity of $6.7
trillion, the largest leap in over 60 years according to a
Bloomberg analysis.
Home equity can be understood as the homeowner's real property
value, with the increase showing that borrowers are finally getting
a better handle on their mortgages as their homes appreciate.
A number of factors have contributed to the jump in home equity,
including a recent increase in the household wealth of homeowners
over the past quarter. In the first few months of 2012, the average
household wealth increased almost 5 percent to $62.9 trillion
dollars from the previous quarter reports the Federal Reserve. The
figures are still a far cry from the $66 trillion net-worth of
households before the recession, but a large increase from when the
nation's net-worth hit rock-bottom in 2009.
More borrowers are starting to save money as reflected in the large
increase in mortgage
refinance following the revamped Home Affordable Refinance
Program (HARP 2.0) back in March. HARP 2.0 made it easier for
underwater homeowners to take advantage of low average interest
rates on mortgages, saving many borrowers money that went to
increasing their average net worth.
Analysts surveyed by Bloomberg predict that the economy will
increase by an average of roughly 2.2 percent through 2012. This
figure is relatively meager when looking at recovery rates
following previous economic downturns, but any positive estimates
reflect good news for borrowers.
With property values going up and mortgage rates sinking, your
household could use mortgage refinance to potentially help increase
its net worth as well. New Penn Financial can point you in the
right direction and help put together a plan to help you be a part
of the economic recovery.
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Double