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$1.3 Trillion in Equity Vanishes in Q3

11/14/2022 1:43 PM | Anonymous

According to Black Knight’s Mortgage Monitor Report for September, 2022, median home prices fell 0.52%, continuing a three-month streak of declines.  They say that despite price corrections, home values in the nation’s 50 largest markets remain elevated by anywhere from 19% to 66% since the start of the pandemic.  However, they point out that $1.3 trillion in recently added equity vanished from the market in Q3, the largest quarterly dollar decline on record, and the largest on a percentage basis since 2009.  Likewise, the number of underwater homeowners has climbed nearly 275K over the past four months (more than doubling the population) with fewer than 500K homes are currently underwater nationwide.  Foreclosure starts declined by 9% to 18.4K, holding the line at 3% of serious delinquencies
in September, down slightly month over month and less than half of pre-pandemic levels.

“In the span of just three months, U.S. mortgage holders saw a total of $1.3T in newly acquired equity evaporate…”

“Also, as we’ve covered in prior Mortgage Monitors, the vast majority of homes at risk of falling underwater are those that were purchased in 2022 and late 2021, at or near pandemic-era peak prices. While these loans clearly deserve careful, ongoing monitoring, to put that into context, just 3.6% of nearly 53M U.S. mortgage holders are either underwater or have less than 10% equity in their homes – roughly half the share coming into the pandemic.”  said Black Knight Data & Analytics President Ben Graboske.

Click here to read the full report at Black Knight.

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