The True Strength of Homeowners Today

Posted by Bend Premier Real Estate on Monday, September 26th, 2022 at 4:15pm.

 

The real estate market is on just about everyone’s mind these days. That’s because the unsustainable market of the past two years is behind us, and the difference is being felt. The question now is, just how financially strong are homeowners throughout the country? Mortgage debt grew beyond 10 trillion dollars over the past year, and many called that a troubling sign when it happened for the first time in history.

Recently Odeta Kushi, Deputy Chief Economist at First American, answered that question when she said:

“U.S. households own $41 trillion in owner-occupied real estate, just over $12 trillion in debt, and the remaining ~$29 trillion in equity. The national "LTV" in Q2 2022 was 29.5%, the lowest since 1983.”

She continued on to say:

“Homeowners had an average of $320,000 in inflation-adjusted equity in their homes in Q2 2022, an all-time high.”

What Is LTV?

The term LTV refers to loan to value ratio. For more context, here’s how the Mortgage Reports defines it:

“Your ‘loan to value ratio’ (LTV) compares the size of your mortgage loan to the value of the home. For example: If your home is worth $200,000, and you have a mortgage for $180,000, your LTV ratio is 90% — because the loan makes up 90% of the total price.

You can also think about LTV in terms of your down payment. If you put 20% down, that means you’re borrowing 80% of the home’s value. So your LTV ratio is 80%.”

Why Is This Important?

This is yet another reason we won’t see the housing market crash. Home equity allows homeowners to be in control. For example, if someone did need to sell their home, they likely have the equity they need to be able to sell it and still put money in their pocket. This was not the case back in 2008, when many owed more on their homes than they were worth.

Bottom Line

Homeowners today have more financial strength than they have had since 1983. This is a combination of how homeowners have handled equity since the crash and rising home prices of the last two years. And this is yet another reason homeownership in any market makes sense. Call a Bend Premier Broker to find out more 541-323-2779.

13 Responses to "The True Strength of Homeowners Today"

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The Lengthy-Time period Good thing about Homeownership - Salem Local News wrote: [...]who regrets their choice. Why is that? The reason being tied to the way you acquire equity and wealth as dwelling values develop with time.
The Nationwide Affiliation of Realtors (NAR) explains:
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The Lengthy-Time period Good thing about Homeownership - Medford Local News wrote: [...]regrets their resolution. Why is that? The reason being tied to the way you acquire equity and wealth as house values develop with time.
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Posted on Wednesday, October 5th, 2022 at 5:47pm.

The Lengthy-Time period Good thing about Homeownership - Portland Local News wrote: [...]their determination. Why is that? The reason being tied to the way you acquire equity and wealth as house values develop with time.
The Nationwide Affiliation of Realtors (NAR) explains:
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Posted on Wednesday, October 5th, 2022 at 6:09pm.

3 Graphs Exhibiting Why At the moment’s Housing Market Isn’t Like 2008 - Portland Local News wrote: [...]extra on their mortgages than their houses have been value. At the moment, many householders are equity rich. That fairness comes, largely, from the best way house costs have appreciated over time. In[...]

Posted on Wednesday, October 26th, 2022 at 10:11am.

3 Graphs Displaying Why At the moment’s Housing Market Isn’t Like 2008 - Salem Local News wrote: [...]on their mortgages than their properties had been value. At the moment, many householders are equity rich. That fairness comes, largely, from the way in which house costs have appreciated over time. In[...]

Posted on Wednesday, October 26th, 2022 at 10:47am.

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Promote Your Home Earlier than the Holidays - Portland Local News wrote: [...]Probability To Transfer Up
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Posted on Tuesday, November 8th, 2022 at 5:24am.

Home Equity: A Source of Strength for Homeowners Today - Salem Local News wrote: [...]payments you’ve made during that time chipped away at the balance of your loan. If your home’s current value is higher than what you still owe on your loan, you may be able to use that increase to your[...]

Posted on Monday, November 14th, 2022 at 9:55am.

House Fairness: A Supply of Energy for Owners Right now - Portland Local News wrote: [...]made throughout that point chipped away on the steadiness of your mortgage. If your property’s current value is larger than what you continue to owe in your mortgage, you could possibly use that enhance to[...]

Posted on Monday, November 14th, 2022 at 10:34am.

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