Homeowner equity has jumped again. The amount of home equity available to mortgage holders, while retaining at least a 20% equity stake in their homes, rose by more than $250 billion in the third quarter 2021. This is according to the latest Mortgage Monitor Report from the Data & Analytics division of Black Knight, Inc. 

Overall, tappable home equity increased by 32% over the past year for an aggregate total of $9.4 trillion.

“As prices have surged over the past 18 months, the average mortgage-holder’s equity stake has risen by $53,000,” said Ben Graboske, president of the data & analytics division. “That works out to nearly $178,000 available in tappable equity to the average homeowner with a mortgage before hitting a maximum combined loan-to-value ratio of 80%.”

This despite the fact that in the third quarter, homeowners tapped into their equity at the highest rate in more than 14 years as cash-outs made up 54% of all refinances. Homeowners took out $70 billion via cash-out refis in Q3 2021, representing just 0.8% of the available tappable equity at the start of the quarter. 

Black Knight data suggests that the average borrower’s mortgage debt now stands at just 45.2% of their home’s value – the lowest total market leverage Graboske says the company has ever recorded, going back at least to the turn of the century.

This month’s Mortgage Monitor also examines the impact of rising prices and interest rates on home affordability, finding that the monthly mortgage payment (principal and interest) to purchase the average-priced home with 20% down has jumped by nearly 25% since the start of the year. Factoring in incomes as well as prices across the country, it now requires 22.4% of the median income to purchase the average-priced home with 20% down and a 30-year mortgage.

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