Gen X homeowners bore the brunt of the housing crash, and it still shows a decade later as they lag behind in gaining equity in their homes, according to the new Zillow Home Equity Report.
Millennials have almost as much equity as the older Gen X homeowners, despite having had much less time to gain equity.
The Zillow Equity Report for the first quarter of 2017 tracks the home equity of more than 50 million homeowners who have a mortgage. The report, which will be released twice a year, tracks the debt that U.S. homeowners are carrying on their homes by age and location.
Highlights from the report:
Among mortgaged homeowners, the typical millennial (less than 35 years old) owes the bank about 76 percent of their home's current value. The median Gen X (35 to 50 years old) homeowner owes 70 percent of their home's value. Boomers (50-65 years old) owe about 56 percent of their home's value, and silent generation (65 and older) homeowners with a mortgage owe 45 percent.
"Roughly half of American wealth is held in home equity," said Zillow Chief Economist Dr. Svenja Gudell. "Paying off the home mortgage is a key step toward retirement for most Americans, and it's clear from these results that Generation X is further from that goal than older generations because of the Great Recession. The good news is that home values are still growing relatively fast in most places, building up home equity for homeowners who rely on the investment they've made in their home."
The difference in how much Gen X homeowners owe on their home loans is an example of how uneven the housing recovery has been across the country. In Baltimore for example, which has seen a sluggish recovery, Gen X owners with a mortgage owe a median of 79 percent of their homes' value. However in Chicago, where homes are still 15 percent below the highs reached during the bubble, Gen X homeowners owe 77.3 percent of their homes' value.
Gen X homeowners are doing particularly well in the San Francisco Bay Area, where home values have grown about 75 percent over the past five years. San Jose is the only metro where mortgaged Gen X homeowners owe less than half of their homes' value, and San Francisco homeowners are not far behind, owing 51.4 percent of their homes' worth.