The most recent release of the Z.1 Financial Accounts of the United States shows a sharp slowdown in the quarter-over-quarter growth of households’ real estate assets. After six consecutive quarters of above 3 percent growth quarter-over-quarter, the third quarter of 2022 saw a 1.74% increase in households’ real estate asset value.
The level of households’ real estate assets increased by $0.72 trillion from $41.19 trillion in the second quarter of 2022 to $41.91 trillion in the third quarter of 2022. The market value of owner-occupied real estate increased 13.82% on a year-over-year basis from $36.82 trillion in the third quarter of 2021. The slowdown in growth of real estate assets coincides with the housing market correction as housing prices adjust across the U.S.
Real estate secured liabilities of households’ balance sheets, i.e., mortgages, home equity loans, and HELOCs, increased over the third quarter from $12.15 trillion to $12.35 trillion, a 1.73% quarterly increase. Year-over-year, real estate liabilities increased 7.43% from $11.50 trillion in the third quarter of 2021. This was the fourth consecutive year-over-year percentage increase above 7 percent. The year-over-year growth of real estate liabilities has steadily been accelerating over the past 3 years, from 2.59% in the third quarter of 2019 (Pre-Pandemic) to now above 7 percent for the past 4 quarters.
Aggregate owners’ equity (i.e., the difference between homeowners’ real estate assets and liabilities) rose from $29.05 trillion to $29.56 trillion, representing 70.52% of all owner-occupied household real estate.