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Mar 6, 2008 1:02 pm US/Eastern

Home Equity Hits All-Time Low

WASHINGTON (CBS4.com) ― Americans' percentage of equity in their homes hit an all-time record low, the Federal Reserve reported. The 47.9% amount of equity in a home also marks the first time homeowners' debt on a home exceeded the equity since the Fed began tracking data in 1945.

Home equity is equal to the percentage of a home's market value minus mortgage-related debt. That amount has steadily decreased, despite the massive surge in home prices in the late 90's and the early part of this decade.

According to Moody's economy.com, an estimated 8.8 million homeowners or about 10.3% of homes will have zero or negative equity by the end of March. In addition, about 13.8 million, or 15.9%, will be "upside down" if prices fall 20% from their peak.

The last Standard & Poor's/Case-Shiller index showed U.S. home prices sank 8.9% in the final quarter of 2007 when compared to the same time in 2006. Those numbers marked the steepest decline in the 20-year history of the index.