First America Corp’s real estate arm just completed a study of homeowner’s equity, noting that total equity across the US remains high, while some markets are full of stretched buyers and refinancers.
They quote $11 trillion in aggregate home equity – I thought the aggregate market capitalization of all residential real estate was only about $18 trillion. Guess I was wrong. Nevertheless, total face value of mortgage-backed securities in the EPN system alone is over $9 trillion, and I have heard that Fannie, Freddie, and the like back quite a bit more than that. Those bonds would have to be sold at pretty hefty premiums for the numbers to work.
So where are these numbers coming from – will someone set me straight on this? I’ll promise to fix my calculator if you do.