By John Voket, RISMedia Columnist
RISMEDIA, March 12, 2010—I recently reported on incrementally rising real estate commissions – which in a declining market could be viewed as bad news for homeowners needing or waiting to sell. But according to the Federal Reserve, there is a glint of good news for those who have some decent level of equity in their home. And it’s doubly important for those who plan to hang onto their property.
Just ahead of Valentine’s Day, the Fed announced that according to the agency’s most recent ‘flow of funds’ survey, homeowners’ net equity grew by nearly $1 trillion between the first and third quarter of 2009. And from June 30 to September 30, 2009, net equity rose by $418 billion.
Validating the Feds numbers was online real estate valuation researcher Zillow.com. Its latest quarterly numbers on negative equity in major markets showed the negative-equity rate among American homeowners as flat in the fourth quarter. But that ratio represented a slight decrease from the first two quarters of last year, when 22% and 23% of owners owed more on their mortgages than the estimated market value of their real estate.
As industry columnist Kenneth R. Harney wrote on February 13, while the slight uptick in equity “is not all that impressive compared with the quarterly increases during the hyperinflationary housing boom years, but it could signal something important: After three years of unprecedented shrinkage in home equity – and three years of rapid expansions in the number of underwater borrowers with negative equity – there are signs that the down cycle may be shifting.”
So there does appear to be some good news out there, at least when it comes to holding onto the value that’s already been established in our homes. Let’s hope that trend continues through this year and beyond!
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