Housing equity surged nearly 40% compared to a year ago and is at a record high, according to a new report from Black Knight, Inc. The average mortgage holder now has $173,000 in equity. That marks an increase of $20,000 just from the end of the first quarter, the report notes.
The increase in equity is being driven by surging home values over the last quarter, says Ben Graboske, Black Knight data analytics president. Home prices have jumped nearly 20% from a year earlier and by 7.4% in the second quarter alone, he notes. “This is by far the strongest growth we’ve ever seen,” he says.
The added equity is helping those who are struggling to make their mortgage payments. About 98% of homeowners in forbearance now have at least 10% of the equity in their homes, according to Black Knight.
“Such strong equity positions should help limit the volume of distressed inflow into the real estate market as well as provide a strong incentive for homeowners to return to making mortgage payments—even if needing to be reduced through modification,” Graboske says.