Real Estate Values Moved Significantly Higher in Q2 of 2021

According to the latest Federal Reserve Z.1 Financial Accounts of the United States (i.e., the “Flow of Funds”) with analysis provided by the National Association of Home Builders, in Q2 of 2021 the aggregate market value of all owner-occupied real estate in the U.S. registered its largest quarterly increase in the past 21 years of data.

Increasing from $33.8 trillion in Q1 2021, real estate rose by $1.1. trillion in value to $34.0 trillion, making it the largest quarterly increase on record. Q2 also experienced unsustainably high home prices appreciation due to a lack of inventory.

On the liabilities side of real estate’s balance sheet, home mortgages rose by $220 billion in the Q1 2021 to $11.3 trillion, which is greater than the previous quarter’s quarterly increase in aggregate value. In terms of the scale of increases, real estate assets are increasing much faster than real estate liabilities.

Aggregate owners’ equity — the difference between the market value of all owner-occupied real estate and the aggregate value of home mortgages — increased in the latest quarter to $23.6 trillion, or 68% of all household real estate. This is the highest share since 1989.