Urban Institute: Mortgage Debt Reaches Its Peak
The household-owned value of the US housing market is currently $26.12 trillion, much higher that the pre-crisis peak of $22.68 trillion in 2006, according to an Urban Institute report. HELOC mortgage debt is also through the roof hitting record highs, though, the percentage of homeowners with a mortgage is at its lowest level since 2005.
"That $26.12 trillion in total housing value is composed of two elements: $10.36 trillion in outstanding mortgage debt (including home equity lines of credit) and $15.76 trillion in home equity (the difference between household-owned real estate and mortgage debt)," according to the Urban Institute.
"Though outstanding mortgage debt has expanded in recent years, the faster and stronger recovery in aggregate home values has lowered the mortgage debt–to–home value ratio (for residential real estate) from a peak of 63.3 percent in 2009 to 39.6 percent in the first quarter of 2019."
The report also states that there is a declining proportion of homeowners that have mortgage which is one reason behind the lower mortgage debt in relation to real estate values.
To take a closer look into why mortgage debt has peaked and why fewer homeowners have a mortgage, click on the image above.
