Mortgage holders lost massive amount of equity in the third quarter: report

US mortgage holders saw a massive loss of equity in the third quarter, mortgage-lending software and analytics company Black Knight found.

Black Knight’s Mortgage Monitor Report, released Tuesday, said the total homeowner equity lost in the three-month period amounted to $1.3 trillion. It marked the “largest quarterly decline on record by dollar value and the largest since 2009 on a percentage basis,” company data and analytics president Ben Graboske said in a statement.

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Moreover, total homeowner equity had dropped almost $1.5 trillion since May, when Black Knight said it peaked. From May to the end of September, the company said the average borrower lost $30,000.

A residential home loan application is arranged for a photograph in San Francisco, California, on July 19, 2012. (David Paul Morris/Bloomberg via Getty Images/Getty Images)

“While additional declines may be on the horizon, homeowner positions broadly remain strong,” Graboske said. “Overall mortgage holder equity is still $5T (+46%) above pre-pandemic levels, for an average gain of more than $92K per borrower during that period.”

The Mortgage Monitor Report found that less than 500,000 homes across the country are underwater, up roughly 275,000 over a four-month period.

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home sales

From May to the end of September, the average borrower reportedly lost $30,000. (iStock/iStock)

Grabroske stated that “just 3.6% of nearly 53M US mortgage holders are either underwater or have less than 10% equity in their homes – roughly half the share coming into the pandemic.”

The mortgage-lending software and analytics company noted there were price corrections across the country for a third consecutive month, with September’s median home price dropping 0.52%. Still, in 50 of the largest US housing markets, home values ​​remain 19% to 66% higher since March 2020, according to Black Knight.

Massachusetts home for sale in 2020

A for sale sign in front of a house on Oct. 6, 2020, in Westwood, Massachusetts. (AP Photo/Steven Senne, File/AP Newsroom)

The interest rate-sensitive housing market has been grappling with rising mortgage rates and high home prices. Fannie Mae found in a recent survey that only 16% of consumers thought it was a good time to buy a home in October, FOX Business previously reported.

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