The housing market lost a record $1.3 trillion in equity in the 3rd quarter as prices continue to fall, new data shows
- The housing market lost a record $1.3 trillion in equity in the third quarter, according to Black Knight.
- That's the largest quarterly dollar-value decline on record, the mortgage software and analytics company said.
The housing market lost $1.3 trillion in equity in the third quarter amid continued home price declines, according to a report from Black Knight.
That's the steepest quarterly dollar-value decline on record and the largest since the 2009 on a percentage basis, the mortgage software and analytics company said.
The third-quarter decline means that equity among mortgaged homes is now down by nearly $1.5 trillion from its May 2022 peak. Plus, the equity of the average borrower has fallen by $30,000 from earlier this year.
Black Knight's Home Price Index also showed median home prices fell 0.52% in September, continuing a three-month streak of declines.
But the report added that while the number of underwater homeowners has increased by nearly 275,000 over the past four months, the total of homeowners that are in debt beyond the current value of their homes remains low by historical standards at 500,000.
And while home prices may continue to drop, overall mortgage holder equity is still 46% above pre-pandemic levels, and home prices remain elevated by as much as 66% since the pandemic, Black Knight said.
"Of course, this – along with rising interest rates – increases the potential for even further headwinds in equity lending as well as heightened default risk," said Ben Graboske, Black Knight's data and analytics president.
The report comes as home prices steadily fall in the US as aggressive tightening from the Federal Reserve sends mortgage rates to 20-year highs.
Last week, Realtor.com reported the median list price for homes in the US fell more than 5% last month from a peak of $449,000 in June of this year. At the same time, more homes are staying listed for longer for less as sellers adjust to a softening market.