by Prometheus Market Insight
The Federal Reserve released the Flow of Funds for the first quarter of 2011 yesterday. Although household net worth has rebounded slightly off of the 2009 low, household real estate percent equity continues to hold near historic lows below 40% as a result of the housing market implosion.
About one third of all households have no mortgage debt, so the more than 50 million households that do have a mortgage are well below the 38% equity level and nearly 11 million households have negative equity. These figures, while staggering, are exactly as anticipated in the wake of the most speculative bubble in US residential real estate history.