A look at the homeowner equity buffer, according to BatchService

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Before we get to today’s piece…

On Sunday, we sent ResiClub PRO members (paid tier) a research article looking at the tariff fight/shock:

6 things the housing sector needs to know about the tariff fight

Since we sent out that report, long-term yields, including mortgage rates, have risen. Why are long-term yields, like the 10-year Treasury yield, rising this week even as stocks fall and recession odds tick up amid trade war fears?

“I suspect the sharp increase in yields is due to hedge funds selling Treasury bonds to raise cash to meet margin calls on their equity holdings. Heightened volatility in bond yields and greater prepayment risk may also contribute to widening mortgage spreads. The chaos caused by the global trade war is undermining the economy, but may not result in lower mortgage rates,” Mark Zandi, chief economist of Moody’s, told ResiClub on Tuesday.

There was speculation online today that China might be selling off U.S. Treasuries, potentially putting additional upward pressure on long-term yields and rates. Is that actually happening?

“Selling treasuries from China isn't a way to prepare for tariffs. I don't believe China is a significant issue here [in terms of rising yields],” Logan Mohtashami, lead analyst at HousingWire, tells ResiClub. Mohtashami echoed Zandi’s take, saying that: “Margin selling and rebalancing portfolios needing more cash is a variable here on treasuries.”

A look at the homeowner equity buffer, according to BatchService

Homeowners are sitting on a lot of equity. That’ll happen when U.S. home prices rise a staggering, and unsustainable, 43% in just 27 months between March 2020 and June 2022 during the Pandemic Housing Boom.

Let’s consider a hypothetical scenario in which U.S. home prices fell by 10%. How would U.S. homeowners, in general, fare?

To have a better understanding of what that equity buffer for the typical borrower might look like, ResiClub reached out to the data pros at BatchService, a fast-growing property intelligence and technology company. Their data scientists analyzed mortgages in their extensive database.

BatchService provided us with loan-to-value ratios (LTVs). It is a financial term that compares the amount of a mortgage loan to the home’s appraised value.

The loan-to-value ratios (LTVs) tracked by BatchService, which uses a more conservative methodology than the FHFA, suggest that if home prices were to fall in more markets, most mortgage borrowers from 2021 or earlier would still have a sizeable buffer.

Of course, given that the Pandemic Housing Boom has been over for a few years now, vintages from summer 2022 to spring 2025 in many parts of the country have much smaller equity buffers than their peers from 2021 and earlier. Not to mention, as a result of amortization, recent borrowers who borrowed in the higher interest rate environment are also paying less toward principal than their peers who secured mortgages with 2-handle or 3-handle rates.

NOTE: The LTV readings from BatchService (which has the national LTV at 62.2%) are higher than those from the calculations by FHFA (which has the national LTV at 46.9%). Why is that?

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These 58 markets have seen the biggest inventory shifts—giving homebuyers more power

While homebuyers and home sellers still see headlines about national home prices hitting new all-time highs, a deeper look reveals that several regional housing markets have shifted, giving homebuyers some power. During the Pandemic Housing Boom, from summer 2020 to spring 2022, the number of active homes for sale in most housing markets plummeted as homebuyer demand quickly absorbed almost everything that came up for sale.

Fast-forward to the current housing market, and the places where active inventory has rebounded to 2019 levels (due to strained affordability suppressing buyer demand) are now the very places where homebuyers hold the most power.

At the end of March 2025, national active housing inventory for sale was still -20% below March 2019 levels. However, more and more regional markets are surpassing that threshold.

In January 2025, 41 of the nation’s 200 largest metro area housing markets were back above pre-pandemic 2019 inventory levels.

In February 2025, 43 of these 200 major markets were back above pre-pandemic 2019 inventory levels.

At the end of March 2025, 58 of the 200 major markets are above pre-pandemic 2019 inventory levels and ResiClub expects that count will continue to rise this year.

Many of the softest housing markets, where homebuyers have gained leverage, are located in Gulf Coast and Mountain West regions. These areas were among the nation’s top pandemic boomtowns, having experienced significant home price growth during the Pandemic Housing Boom, which stretched housing fundamentals far beyond local income levels.

When pandemic-fueled migration slowed and mortgage rates spiked, markets like Cape Coral, Florida, and San Antonio, Texas, faced challenges as they had to rely on local incomes to sustain frothy home prices. The housing market softening in these areas was further accelerated by the abundance of new home supply in the pipeline across the Sun Belt. Builders in these regions are often willing to reduce prices or make other affordability adjustments to maintain sales. These adjustments in the new construction market also create a cooling effect on the resale market, as some buyers who might have opted for an existing home shift their focus to new homes where deals are still available.

In contrast, many Northeast and Midwest markets were less reliant on pandemic migration and have less new home construction in progress. With lower exposure to that demand shock, active inventory in these Midwest and Northeast regions has remained relatively tight, keeping the advantage in the hands of home sellers.

Generally speaking, housing markets where inventory (i.e., active listings) has returned to pre-pandemic levels have experienced weaker home price growth (or outright declines) over the past 24 months. Conversely, housing markets where inventory remains far below pre-pandemic levels have, generally speaking, experienced stronger home price growth over the past 24 months.

Outstanding mortgage rate stats

Last week, FHFA updated its National Mortgage Database Program to include final Q4 2024 data 👇

Q1 2022 ---> 85.5% of active U.S. mortgages had an interest rate under 5.0%

Q4 2024 ---> 72.1% of of active U.S. mortgages had an interest rate under 5.0%

Become your local housing authority: How to use ResiClub PRO to build a kick-butt local housing market newsletter

On Monday, April 14th, we will hold a special webinar for ResiClub PRO members at 3 p.m. ET showing members how to build a local housing newsletter.

This particular webinar is perfect for housing stakeholders (builders, investors, real estate agents, etc.) who’d like to create a locally focused housing market newsletter. We’ll show you…

1. How to get a website domain for your newsletter

2. Where to host your newsletter (free up to 2,500 subscribers)

3. How to build your email list

4. How to insert ResiClub charts and maps into your newsletter

5. Tips on story formatting, story structure, and reading housing data

6. What ResiClub PRO charts and maps would be great for your localized newsletter