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The focus of the Summit is The Year-Round Purchase Market. Record low rates led to a banner year for mortgage lenders in 2020, and this year is expected to be just as incredible.

How real estate agents can increase profitability in 2021

As real estate professionals strategize on how to do business in this competitive, fast-paced market, they’ll discover the need for better tools to market their listings.

HousingWire's 2021 Spring Summit

We’ve gathered four of the top housing economists to speak at our virtual summit, a new event designed for HW+ members that’s focused on The Year-Round Purchase Market.

An Honest Conversation on minority homeownership

In this episode, Lloyd interviews a senior research associate in the Housing Finance Policy Center at the Urban Institute about the history and data behind minority homeownership.

Politics & MoneyMortgageReal Estate

U.S. home values reach a record high of $26.1 trillion in Q1, Fed says

Home equity rises to the highest level since 2002

The value of all U.S. owner-occupied homes increased to a record $26.1 trillion in the first quarter, according to a Federal Reserve report released Thursday known as the Flow of Funds. 

That was a gain of 4.3% from a year earlier, the slowest annualized increase since 2012. The collective value of U.S. homes is now 15% higher than the bubble peak reached in 2006. Once that bubble popped, it was a decade before values recovered to the same level.

As home values rose in the first quarter, so did homeowner equity, meaning the worth of a home compared to its mortgage. Americans owned 60.4% of their homes in the first quarter, the highest level of equity since 2002.

Mortgage rates have tumbled more than a percentage point in the last six months as the American economy showed signs of slowing and investors worried about the fallout from trade wars. The average U.S. rate for a 30-year fixed mortgage is 3.82% this week, the lowest since mid-2017, Freddie Mac said in a report on Thursday.

Lower mortgage rates support continued gains in home prices, because cheaper financing means people shopping for homes qualify for higher-balance mortgages and can bid more for properties they want. 

“Existing home sales have benefited from low mortgage rates and a healthy job market,” Freddie Mac said in its May forecast. “We expect stronger home sales and housing starts in the coming months.”

An increase in home equity traditionally has been a support to the U.S. economy as Americans either refinance their first-lien mortgages at higher balances, known as cash-out refis, or get home equity loans in a junior lien position. That supports consumer spending, which accounts for 70% of the U.S. economy. Cashed-out equity typically is used either for renovations, college tuition, or to pay off credit card debt, according to Fed economists.

Americans converted $19 billion of their home equity into cash in the first quarter, the largest amount since the year-earlier quarter when it was $22.7 billion, according to a Freddie Mac estimate. Most was through cash-out refis, at $16.7 billion, while home equity loans accounted for $2.3 billion.

Today’s level of equity cash-outs pales in comparison to the amount seen during the peak of the housing bubble. For example, in 2006’s first quarter, Americans turned $80.7 billion of equity into cash using either refis or home equity loans, according to Freddie Mac data. 

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