U.S. Home Equity Reaches All-Time High: Real Estate Market Crash



Home equity in the US has reached an all-time high furthering the fear of a housing bubble. Home equity is defined as the value of real estate minus mortgage debt. We discuss both homes owned by homeowners with mortgages as well as investor owned homes and occupied homes that are free and clear.

There has been fear that this rising home prices has created a housing bubble in the real estate market and it could cause the housing market to crash. We talk about how this is not likely to happen in the short-term and how home equity is giving the real estate market in the US a solid base of support to protect it from a downturn in the future.

00:00 Home Equity All Time High
01:00 How Much Mortage debt exists
02:29 Home equity compared to loan amounts
07:20 Inflation being driven by excess equity
08:50 Home equity vs delinquent mortgages
11:22 History of Home Values and Equity
14:20 history of total mortgage debt
20:20 Historical trend-line of home prices
22:30 why the housing market won’t likely crash soon
25:00 home price predictions
28:30 home affordability
30:20 Housing market outlook

22 comments

  1. This is one of the most beautiful explanation on the house market. I’m here in the United Kingdom and hear all this doom and gloom getting other YouTubers views. Thanks for the solid explanation. I’m on the right track with my rental property in the USA 🇺🇸.

  2. Of course folks have more equity..house prices are up…once people take out equity…their debt increases. I would venture to say most folks took out variable rate HELOCs that with rising rates will puncture the overinflated bubble…

  3. You might not have a hundred million dollars to invest, but that doesn’t mean your money can’t share in the same opportunities available to others. You work hard for your money; make sure your money works hard for you.

  4. Great video! So from the trend line graph, it seems prices are where they should be & thanks to rising rates, they will most likely stay there. They may continue to rise but not by crazy percentages right? Ok so my question is regarding interest rates. I read an article today that 30 yr fixed mortgages are almost at 7% (6.8 or so). However Im seeing other articles & online loan calculators that put them at 4.9% -5.2%. I don’t understand this discrepancy. Can you tell me an average interest rate for 30 yr fixed, 20% down, FICO 816 as of today? Also what do you think will happen w interest rates in the next few years and/ or in the case of a recession? Thank you! Also thank you for taking the time to do these videos & inform us all. It really helps w decision making & I appreciate it:)

  5. <Thanks for continuous great videos, I feel those who would allow the market dynamism to determine when to trade or not are either new in space in general or probably just naïve, the sphere have seen far worse times than this, enlightened traders continue to make good use of the dip and pump even acquiring more equities towards trading sessions, I'd say that more emphasis should be put into trading,since it is way profitable than hodling. Tradlng went smooth for me as I was able to raise over 9 BTC when I started at 1.5 BTC in just 6 weeks implementing trades with signals and insights from Jeff signal. I would advise y'all to trade your asset rather than hodl for a future you aren't sure about.

  6. for home buyers say on a $550K, what are lenders needing for down payment. pay stub with a 775 range fico? my last home purchase was 2004 in FL. so i'm out of the loop on what' going on. oh yea, it was with countrywide in a strip mall office and every cubicle 20 or so was filled that day.

  7. Another thing that could cause a downturn would be job losses and unemployment getting high. I absolutely dont see that as a contributor in the next couple of years. There are so many job openings right now that anyone that wants a job can get one. Interest rates at 3 percent was such an anomaly too. I think 5 percent is still a decent rate and probably closer to where they should be. Honestly the only thing that I see that could really affect housing and the economy as a whole would be a war that actually affected us here in the US. To me, thats the black swan event that none of us can prepare for.

  8. So glad we bought our home in 2013 it has really been the best investment we could have made. Only problem with current market is we would like to move but can't find a home where we want to buy.

  9. I don't see the LV market having more inventory for a while. Builders aren't overbuilding as far as I can see, rising interest rates make it more difficult to "upgrade" within the LV market, empty nesters might downsize but replacement prices are high, and as long as CA has high income and property taxes as well as high equity in the homes they own, we will be having an influx into Nevada (AZ, FL and TX as well). The only thing might be people losing jobs in mass but they would be better off selling than foreclosing. Little inventory means no "crash". Until more people are moving out of LV than moving in or home builders overbuild, we will see no shortages. However, a market crash in CA might hurt. After all, all RE markets are local.

  10. Most People who are waiting for a crash to buy would not actually buy IF there was a crash. We saw it in 2008-10 that prices were clearly super low and people were way too scared to buy. People who are afraid of crash are going to be even more afraid during a crash. They're irrelevant.

  11. There could be a crash (don't see it) but if it does I'm pretty sure it isn't going to happen exactly the same way as 2008. In 2008 virtually all people didn't understand the problem that was brewing. Yeah no-doc loans and people buying spec homes seemed crazy but it really was the bundling of mortgages and selling those to investors that was surprised the market. You did what?

    IF a crashed happened again I assume it would be caused by something else we don't see coming.

  12. One thing I keep noticing on graphs is looking at the trend before 2005 for a few decades and then today our levels of value and equity looks where the trend line would expect. We've all been amazed at the recent increases but it looks to me like we're just catching up from the 2008 crash and the decade after. Same with new home builds…but that takes a lot more time. Same for rent.

    Edit: Hahaha, just got to the part of your video where you say the same about trend lines.

  13. Here in Phoenix this time of year we're used to seeing For Sale signs to sprout this time of year. But this spring few signs and what's sprouting is construction projects. New windows, roofs, painting, landscaping etc… I saw this start a couple months ago and thought maybe people were getting ready to sell…but nope. Not seeing those home lists and the types of projects are typical flip type projects. Could be a new normal for the next few years. Owners are in good shape going into any potential recession. This could also create a soft landing or push off a recession. All that equity can be a lot of demand in construction.

  14. I love the data based videos, glad someone is not pumping the sky is falling narrative to drive video views!

  15. There might not be a housing market collapse like we saw in 2008 because sure as you two mention this isnt a debt problem…. I think we start to see the problems when the millennials (largest demographic) enters into their first homes 30yr fixed mortgages at 5-6% rates on a house that is +20% over priced due to limited supply. These high monthly payments paired with other debts and broader inflation completely destroys middle class purchasing power and extra cash – less spending – less growth – big recession. These kids wont have cash for repairs, maintenance ect. Everyone ran to the light and tried to get their hands on anything they could move into. Huge risks – watch these houses start to fall apart and no one can afford to fix them anymore. We got a bigger problem coming is my thoughts.

  16. Great analysis. Only one one thing: Todd said billions instead of trillions when reading the graphs.

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