Data from the U.S. Federal Reserve shows that household real estate wealth took a modest step back in the third quarter of 2025, but the bigger picture still points to a housing market with historically strong homeowner equity.

I'm Kathy Fedke, and this is real estate news for investors.

This is Real Estate News with Kathy Fedke.

According to the Fed's latest Z.1 financial accounts, the total market value of owner-occupied

residential real estate fell to $48 trillion in the third quarter. That's a 0.7% decline from the previous quarter,

though values remain 1.5% higher than a year earlier. This measure looks at more than just home

prices. It combines repeat sales data with estimates of new housing added to the market,

capturing both price changes and growth in the overall housing stock. That's why household

real estate wealth can still trend higher year over year, even as price growth cools. At the same time,

household real estate debt continues to rise. Mortgages, home equity loans, and he lock balances

increased 0.8% in the third quarter, bringing total

real estate secured liabilities to $13 trillion. That's nearly 3% higher than a year ago. Even with

a slight dip in asset values, homeowners are still sitting on substantial equity. Owners' equity

made up 71% of real estate value in the third quarter,

down slightly from the prior quarter, but still historically elevated. In fact,

homeowner equity has remained above 70% for 15 consecutive quarters, marking the longest stretch

at that level since the 50s.

Total homeowner equity now stands at $34 trillion.

For investors, this data reinforces a key theme.

While housing momentum has slowed from its pandemic-era peak, the balance sheets of U.S. households remain strong. That equity cushion continues to limit

distress sales and supports overall market stability, even in this higher interest rate environment.

This is something we've predicted at Real Wealth for years. If you'd like to see my housing forecast for

...