The most recent release of the Z.1 Financial Accounts of the United States shows a decrease in the value of households’ real estate assets over the fourth quarter of 2022. As home prices begin to decrease from pandemic highs, households’ real estate asset value fell for the first time since the first quarter of 2012.
The level of households’ real estate assets decreased by $0.07 trillion from $43.57 trillion in the third quarter of 2022 to $43.50 trillion in the fourth quarter of 2022. The market value of owner-occupied real estate increased 10.77% on a year-over-year basis from $39.27 trillion in the fourth quarter of 2021.
Real estate secured liabilities of households’ balance sheets, i.e., mortgages, home equity loans, and HELOCs, increased over the fourth quarter from $12.36 trillion to $12.52 trillion, a 1.25% quarterly increase. Year-over-year, real estate liabilities increased 6.48% from $11.75 trillion in the fourth quarter of 2021. The year-over-year growth of real estate liabilities has decelerated for two consecutive quarters as home sales have slowed down across the country.
Aggregate owners’ equity (i.e., the difference between homeowners’ real estate assets and liabilities) fell from $31.21 trillion to $30.98 trillion, representing 71.22% of all owner-occupied household real estate.