Rising Home Values Bring Equity to Highest Level Since 2008

Rising home values in September brought homeowner equity to its highest level since the third quarter of 2008, according to the Obama administration's latest ""Housing Scorecard"":http://portal.hud.gov/hudportal/documents/huddoc?id=sept_nat2012_sc_final.pdf.

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The scorecard was a little more positive than it has been in recent months, though officials continued to caution that the overall recovery is still fragile.

According to the report, homeowner equity increased $406 billion, or 5.9 percent, to $7.3 trillion in the second quarter of 2012. After experiencing a turnaround into growth in the year's first quarter, total equity has grown $863 billion, or 13.5 percent, since the end of 2011.

Increases in both new and existing home sales added to the good news, as did continuing upward trends in home prices. Analysts in 2009 project a severe downturn in prices followed by several years of slow, steady into 2014, but Friday's scorecard revealed much larger quicker-albeit not as steady-price gains.

""As the September housing scorecard indicates, our housing market is showing important signs of recovery-with homeowner equity at a four-year high and summer sales of existing homes at the strongest pace in two years,"" said Erika Poethig, acting assistant secretary at HUD. ""The Administration's efforts to keep housing affordable and refinances strong are critical with so many households still struggling to make ends meet.""

Mortgage originations also showed some gains in the second quarter, with refinance originations showing a nearly 480,000 year-over-year increase to 1.35 million. Purchase originations lost some footing year-over-year, falling 44,000 to 497,800.

Delinquency rates fell month-over-month and year-over-year across the board, with prime and subprime mortgages posting delinquencies of 3.8 percent and 29 percent, respectively. FHA mortgages also improved performance-wise, falling to 11.7 percent delinquency despite a month-to-month increase in seriously delinquent mortgages.