Equity Explosion Bodes Well for Lenders
American homeowners got $20,000 richer in the second quarter just sitting in their family room. Black Knight’s newest Mortgage Monitor says that was the average gain in borrower equity during the quarter as home prices continued to soar.
Tappable equity, the amount available to homeowners before reaching a maximum 80 percent combined loan-to-value (CLTV) ratio, hit a record high total of $9.1 trillion, a $1 trillion increase in a single quarter. The average mortgage holder saw his/her tappable equity grow by $20,000 during that period to a total of $173,000.
The weighted average CLTV for the mortgage market is now 46 percent, the lowest leverage on record. Fewer than 3 percent of mortgaged homeowners have less than 10 percent equity and only 0.6 percent are underwater, both record low figures.
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