Snoqualmie
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Estate, Carnation Real Estate, Suncadia Real
Estate, Easton Real Estate, ThomasWolter.com,
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The combined net worth of Americans fell in the latest data, but housing equity continued to trend higher. According to the Federal Reserve, the net worth of all households fell by $1.2 trillion in the third quarter, principally due to the wobbly stock market. Housing wealth, by contrast, rose by $360 billion from the prior quarter, thanks to the continued rise of home values in most parts of the country. With the latest gain, total housing equity now stands at $12.4 trillion. This is quite a change from the trough of 2009 to 2011, when housing equity stood essentially at half the current level at $6.5 trillion.
Hindsight is 20/20. The bubble prices of 2005 and 2006 could not be sustained and home price gains during recent years and their accompanying housing equity gains are still in recovery mode and have not yet matched the prior peak. Nonetheless, the momentum suggests a new peak in home prices and housing equity, at least at the national level, is likely to occur in 2016. With it, the unusual pattern of homeowners staying in their home for longer than the historical norm should vanish. For a long time a survey of recent home sellers indicated they had lived in their home for 6 years on average before listing and seeking a different home elsewhere. From the housing bust on, years of average tenure in the same home began to lengthen and then reached a cyclical peak of 10 years in 2014. There are always changes in family circumstances over the years – marriages, divorces, adding children to the family, empty nesting, etc. – and economic changes like the offer of a better job at a different location that necessitates a move into a new home. So the rise in tenure was unusual from a statistical point of view, and was bound to revert back to normal. The rise in housing equity, along with improving job market conditions, is helping to coax homeowners back into the market. In 2015, tenure fell to 9 years, though this is still high. That means there are still many homeowners in the wrong home (as life events have affected their living situation) and they will naturally be seeking to find the right home. The backdrop of rising housing equity and job creation will help.
Another unique aspect of current housing equity gains is that they are accompanied by a general decline in mortgage balance. The total mortgage debt outstanding was $10.6 trillion in 2008. Since then it has steadily fallen – either via cash-in refinance (not cash-out) or from homeowners paying down their mortgages at a faster than usual pace. There is now $9.5 trillion in mortgage debt. The housing market therefore is on much more solid ground, and we should anticipate a greater number of existing homeowners utilizing a good portion of this accumulated equity as a down payment for their next home purchase.
Snoqualmie
Pass Real Estate, Snoqualmie Pass Properties, Snoqualmie Pass Homes, Snoqualmie
Pass Lots, North Bend Real Estate, Snoqualmie Real
Estate, Carnation Real Estate, Suncadia Real
Estate, Easton Real Estate, ThomasWolter.com,
http://www.snoqualmiepassliving.com
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One piece of bad news concerning the rising housing equity is that those who are not homeowners are feeling left out. With the homeownership rate at what is essentially a 50-year low, the middle class that is generally associated with property ownership is getting smaller. The share of first-time buyers could remain at near historic lows because the rise in home prices is outpacing income growth. From a policy perspective, therefore, there should not be any new hindrances added to the housing market recovery such as using the positive revenues of Fannie and Freddie for non-housing purposes or threatening constant lawsuits against lenders which will hurt mortgage originations.
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