Most Of The Debt Remains

Interesting series of three graphs at Calculated Risk regarding home equity. Here's one graph....

The percentage of home equity virtually defines the middle class and so seems like a good proxy for the economic health of the middle class:

This graph shows homeowner percent equity since 1952.

Household percent equity (of household real estate) was up to 43% from the all time low last quarter of 41.9%. The increase was due to a slight increase in the value of household real estate and a decline in mortgage debt - and also a decline in overall GDP (so the ratio increases).

When prices were increasing dramatically, the percent homeowner equity was stable or declining because homeowners were extracting equity from their homes. Now, with prices falling, the percent homeowner equity has been cliff diving.

Note: approximately 31% of households do not have a mortgage. So the 50+ million households with mortgages have far less than 43% equity.

...After a bubble, the value of assets decline, but most of the debt remains.