The historic run-up in home prices during the first two years of the pandemic gave homeowners record amounts of new home equity.
Since May, however, about $1.5 trillion of that has vanished, according to CNBC news.
Homeowner equity peaked at $17.6 trillion collectively last May, after home prices jumped 45% since the start of the pandemic.
At the end of September, prices were still up 41%, and equity was still quite strong. Borrowers who bought their homes before the pandemic collectively have $5 trillion more than they did before the pandemic hit. That translates to a gain of $92,000 more equity per borrower than in February of 2020.
Home prices began to weaken as mortgage rates rose in the spring, making it a lot less affordable to buy. The monthly payment on the average home, with a 20% down payment on a mortgage, is up nearly $1,000 since the start of the year.
You can lock in your gains now with a reverse mortgage. Lenders have already taken steps to avoid getting hurt like they did in 2008. Just last week they announced that they will be reducing the amount they will loan by 10% and more changes will be coming. Try my reverse mortgage calculator to see how much you can qualify for.
