The $5.9 trillion in tappable home equity on mortgage properties is a result of a $140 billion drop in the third quarter of 2018, according to a recent report. The drop in tappable home equity means the number of homeowners with tappable home equity has drop to 272,000.
"The average homeowner who has at least 20 percent equity in their home has approximately $136,000 in tappable equity, which also represents a drop of about $2,300 compared with Q2 2018, according to the study’s findings," according to Reverse Mortgage Daily.
"A decline in equity affected 60 of the nation’s largest 100 markets in the third quarter, with the study detailing that losses were driven by 'softening home prices in the most equity-rich among them.'"
The state mostly responsible for the large decline is California, at close to 75 percent of the total decline in tappable equity. The rise in interest rates have created a bit of an unsteady and uneasy trend throughout the housing market.
"This occurrence marks 'the first decline we’ve seen since the housing recovery began, and its cause can be traced directly to softening home prices in some of the nation’s most expensive – and equity-rich – markets,' said Ben Graboske, executive vice president of Black Knight’s Data & Analytics division," according to the report.
To learn more about the excessive drop in tappable home equity, click on the image above.