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IPFS News Link • Housing

Real Estate Assets Off $6.3 Trillion From Peak: Home Equity Falls From 60% to 38.5%

The Federal Reserve released the Q4 2010 Flow of Funds report this morning: Flow of Funds. According to the Fed, household net worth is now off $8.8 Trillion from the peak in 2007, but up $8.1 trillion from the trough in Q1 2009. Update: Household net worked peaked at $65.7 trillion in Q2 2007. Net worth fell to $48.7 trillion in Q1 2009 (a loss of almost $17 trillion), and net worth was at $56.8 trillion in Q4 2010 (up $8.1 trillion from the trough). The Fed estimated that the value of household real estate fell $260 billion to $16.37 trillion in Q4 2010. The value of household real estate has fallen $6.3 trillion from the peak - and is still falling in 2011. This graph shows homeowner percent equity since 1952. Household percent equity (as measured by the Fed) collapsed when house prices fell sharply in 2007 and 2008. In Q4 2010, household percent equity (of household real estate) declined to 38.5% as the value of real estate assets fell by almost $260 billion.

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