Unless you've been living under a rock, it likely won't come as a shock to you that the National Association of Realtors has recently published a report showing that the loss in equity of Los Angeles, Long Beach, and Orange County homes has had a direct affect on the net worth of homeowners.
The net worth of an individual is measured by their total assets, like homes and bank accounts, minus total liabilities, such as mortgages, car loans, credit cards, and other debt. Over sixty-two percent of homeowners in the southern California area also have direct or indirect stock holdings that have likely been dramatically and negatively impacted over the last three years.
With a dramatic dip in home prices that began mid-year of 2007, homeowners who have purchased their homes in the last five years have lost considerable equity, with an average loss of just under $80,000 in home value. Those who have been in their current homes for ten to twenty years have been less impacted by the dramatic decline in values, while retaining between $188,000 and $192,000 worth of equity in their homes.
Individual net worth is a critical measure of the overall health of the economy since it dictates and drives consumer confidence, decisions regarding consumption and savings, work and leisure activities.
The Fed recently resurveyed households near the end of 2009 to further examine how the market decline and supposed recovery have continued to affect net worth of U.S. homeowners. Results are expected later this year- stay tuned!
Visit Realtor.org for more facts, figures, and statistics on today's national housing market.
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