
Given how we have seen more unemployment claims than ever before over
the past several weeks, fear is spreading widely. Some good news,
however, shows that more than 4 million initial unemployment filers have
likely already found a new job,
especially as industries such as health care, food and grocery stores,
retail, delivery, and more increase their employment opportunities.
Breaking down what unemployment means for homeownership, and
understanding the significant equity Americans hold today, are important
parts of seeing the picture clearly when sorting through this
uncertainty.
One of the biggest questions right now is whether this historic
unemployment rate will initiate a new surge of foreclosures in the
market. It’s a very real fear. Despite the staggering number of claims,
there are actually many reasons
why we won’t see a significant number of foreclosures like we did
during the housing crash twelve years ago. The amount of equity
homeowners have today is a leading differentiator in the current market.
Today, according to John Burns Consulting, 58.7% of homes in the U.S. have at least 60% equity. That number is drastically different
than it was in 2008 when the housing bubble burst. The last recession
was painful, and when prices dipped, many found themselves owing more on
their mortgage than what their homes were worth. Homeowners simply
walked away at that point. Now, 42.1% of all homes in this country are mortgage-free, meaning they’re owned free and clear. Those homes are not at risk for foreclosure (see graph below):
In addition, CoreLogic
notes the average equity mortgaged homes have today is $177,000. That’s
a significant amount that homeowners won’t be stepping away from, even
in today’s economy (see chart below):
In essence, the amount of equity homeowners have today positions them to be in a much better place than they were in 2008.

