Americans' percentage of equity in their homes fell below 50 percent for the first time since 1945, when such records began to be kept, the Federal Reserve (Fed) said. Homeowners' portion of equity fell to 49.6 percent in the second quarter of 2007, the central bank reported in a quarterly report, and fell further to 47.9 percent in the fourth quarter, which was the third consecutive quarter under 50 percent. The second half of 2007 marks the first time homeowners' debt on their houses exceeds their equity since the Fed began tracking the data in 1945. According to the Fed report, the total value of equity also fell for the third consecutive quarter to $9.65 trillion from $9.93 trillion in the third quarter. Home equity-the percentage of a home's market value minus mortgage-related debt-has steadily decreased even as home prices soared earlier this decade, largely due to a surge in refinancings for cash, home-equity loans, and lines of credit against the value of a home. Economists expect the figure to drop even further and declining home prices lower the value of most Americans' single largest asset.
