Household Net Worth At All Time Lows

From Calculated Risk: Fed: Household Percent Equity Cliff Diving

Household percent equity was at an all time low of 44.7%, down from 46% in Q2, 50.9% in Q3 ‘07. The recent peak was 59.6% in 2001.

When prices were increasing dramatically in recent years, the percent homeowner equity was declining because homeowners were extracting equity from their homes. Now, with prices falling, the percent homeowner equity is Cliff Diving!

Note: approximately 31% of households do not have a mortgage. So the 50+ million households with mortgages have far less equity than 44.7%.

Household assets as a percent of GDP is now declining. Mortgage debt as a percent of GDP has declined for the last three quarters. Household debt (home mortgages + consumer credit) as a percentage of disposable income, for Q3 it was 123% up from 122% in Q2 but down from 126% in Q1. It peaked at 127% in 2006 and is still well above its level of 83% in 1995.

Rex Nutting at MarketWatch has more: U.S. households pay down debts for first time

Stung by the loss of more than $2.8 trillion in their net wealth, the nation's households paid down their debts in the third quarter for the first time since at least 1952, the Federal Reserve reported Thursday.

As of Sept. 30, households' total outstanding debt shrank at an annualized rate of 0.8% from $13.94 trillion to $13.91 trillion, the Fed said in its quarterly flow of funds report. It's the first decline in household debt ever recorded in the report.
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With the stock market plunging and home prices falling rapidly, American households lost a total of $2.81 trillion in wealth during the third quarter, the most ever. Wealth fell at an 18% annual rate during the quarter.

From Calculated Risk: Total Household Networth as a percentage of GDP