US Homeowner's equity percentage now lowest on record

[Dee Dee]

Fed report shows US homeowner equity percentage remains below 50 percent, lowest on record

http://www.iht.com/articles/ap/2008/06/05/business/NA-FIN-US-Home-Equity.php

The equity Americans have in their most important asset — their homes — has dropped to its lowest level since the end of World War II.

Homeowners' portion of equity slipped to 46.2 percent in the first quarter from a revised 47.5 percent in the previous quarter. That was the fifth quarter in a row below the 50 percent mark, the Federal Reserve said Thursday.

At the end of March, nearly 8.5 million homeowners had negative or no equity in their homes, representing more than 16 percent of all homeowners with a mortgage, according to Moody's Economy.com Chief Economist Mark Zandi. By June 2009, he estimates that will increase to 12.2 million, or almost one out of every four homeowners with a mortgage.

But to put that number in perspective, one out of every three homeowners own their properties free and clear, with no mortgage at all.

Still, Zandi said, "For most, their home is their key asset. If they have no equity in their home, likely their net worth is negative too. Their entire balance sheet will be underwater."

QUESTION: Does anyone know if they're counting home equity loans (second mortgages) into the equation here, or are the equity percentage figures based solely on first mortgages?