by Calculated Risk on 6/05/2008 11:25:00 AM

The Fed released the Q1 2008 Flow of Funds report today: Flow of Funds.

The Fed report shows that household real estate assets decreased from $20.046 trillion in Q4 to $19.717 trillion in Q1 2008. That is a decline of $328.9 billion.

When we subtract out new single family structure investment and residential improvement, the value of existing household real estate assets declined by $431 Billion.

Household percent equity was at an all time low of 46.2%.

Click on graph for larger image in new window.

This graph shows homeowner percent equity since 1952. Even though prices have risen dramatically in recent years, the percent homeowner equity has fallen significantly (because of mortgage equity extraction 'MEW'). With prices now falling - and expected to continue to fall - the percent homeowner equity will probably decline rapidly in the coming quarters.

Note: approximately 31% of household have no mortgage. So the 50+ milllion households with mortgage have far less equity than 46.2%.

The second graph shows household real estate assets and mortgage debt as a percent of GDP. Household assets as a percent of GDP is now declining, although mortgage debt as a percent of GDP only decreased slightly in Q1.

More later ...