As the weeks go on with high levels of unemployment, people continue to wonder what this means for the housing market: Will we see a rise in foreclosures? Will home values drop? 

Here is the good news:

The housing crisis of 2008 continues to have an impact on American homeowners. 

Home Equity in the Early 2000s

First, let’s go back. In the early 2000s, there was an increase in the number of homeowners taking out a home equity line of credit (HELOC). This line of credit, secured by your property as collateral, offers a revolving credit line. A HELOC is often used for large expenses or to consolidate debt from other loans. People started using this loan to finance everything from home renovations to their children’s college tuition. 

When the market crashed and home values dropped, people began to learn that they now owed more on their home than it was worth. This led to people walking away - resulting in an increase in foreclosures. 

Home Equity Today

Keeping Current Matters



Over the past decade, consumers have worked to build equity in their homes, with more people staying away from HELOCs and other loans. Today, 58.7% of homes have at least 60% equity. In addition to this, 42% of homeowners own their property ‘free and clear,’ meaning they do not have a mortgage at all. 

This puts homeowners today in a much better position than in 2008. Higher levels of home equity mean that foreclosures will be less likely. Homeowners do not feel like they have to sell if the price and timing aren’t right. According to a NAR Flash Survey, 51% are delaying the process a couple of months. Bottom line: Sellers are not in a rush because they have built up equity and are comfortable with their monthly payments. 

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