More Americans House-Rich But Still Saving

Rising home prices and conservative borrowing have more homeowners south of the borders sitting on a record amount of potential cash.

A new study by financial property data provider CoreLogic says today’s mortgage holders saw their home equity increase by 4.8% annually at the end of the second quarter. This is a collective gain of nearly $428 billion. Break it down by borrower, and the average homeowner with a mortgage gained $4,900 in home equity in just one year.

Another report from Black Knight says the amount of equity available for homeowners to tap reached a record high $6.3 trillion in August. It defines tappable equity as the share of equity available for homeowners with mortgages to borrow against while still holding 20% equity in the home.

Homeowners, however, are sitting on their equity more than they have in the past.

Just $54 billion in equity was withdrawn in the first quarter of this year. That is the lowest volume in four years and the lowest share of available equity tapped since Black Knight began tracking the metric in 2008. Less than 1% of tappable equity was withdrawn. Cash-out refinance withdrawals fell from $27.9 billion in the fourth quarter of 2018 to $27.3 billion in the first quarter of 2019, despite a steep decline in mortgage rates.