The first quarter of 2023 release of the Z.1 Financial Accounts of the United States shows for a third consecutive quarter the value of households’ real estate assets contracted. The combination of economic uncertainty and declining home prices has played a role over the past year in decreasing the value of households’ real estate assets.
The level of households’ real estate assets decreased by $0.61 trillion from $41.79 trillion in the fourth quarter of 2022 to $41.18 trillion in the first quarter of 2023. The market value of owner-occupied real estate decreased 1.36% on a year-over-year basis from $41.75 trillion in the first quarter of 2022. This was the first year-over-year decline in the value of households’ real estate assets since the second quarter of 2012.
Real estate secured liabilities of households’ balance sheets, i.e., mortgages, home equity loans, and HELOCs, increased over the first quarter from $12.47 trillion to $12.52 trillion, a 0.36% quarterly increase. Year-over-year, real estate liabilities have increased 5.70% from $11.84 trillion in the first quarter of 2022. The year-over-year growth of real estate liabilities has decelerated for three consecutive quarters as home sales have slowed across the country.
Aggregate owners’ equity (i.e., the difference between homeowners’ real estate assets and liabilities) fell from $29.31 trillion to $28.66 trillion, representing 69.60% of all owner-occupied household real estate.