Fed Sees Major Improvement in Home Equity During Q3 2013

After extensive data analysis, the Federal Reserve has released information that net equity in household real estate increased by $2.2 trillion in the third quarter of 2012 to Q3 2013. In addition, homeowners’ equity as a percentage of household real estate experienced a drastic increase—from 44.3% a year ago to 50.8% at the end of Q3 2013, according to the Fed.

Net equity is the difference between a home’s value and what the homeowner actually owes the financial institution and homeowners’ equity is a percentage of household real estate. In 2008, millions of U.S. homeowners got hit with negative equity due to the fall of the housing market.

This has been good news for many U.S. homeowners who have been underwater with their home loans and were paying more than what their houses are worth. Now, thanks to  increasing U.S. housing prices, more homeowners are seeing positive net equity and fewer homeowners are underwater.

Housing prices have been increasing since 2012, and according to the recently released S&P/Case Shiller composite index of 20 metropolitan areas, home prices rose 13.6% this year, marking the strongest year-over-year gain since February 2006, when the increase was 13.8%.


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