Don't fret over equity report

The dollar losses involved were huge and sobering, especially in the frothiest of the boom markets: California, Florida, the Middle Atlantic states and New England.

But it's important to keep the numbers in perspective. They may not ring true for your housing situation, your neighborhood or where you want to buy or sell. It all depends on when you bought, and where.

With that caveat in mind, here's a quick overview of the home-equity estimates assembled by the Fed and released June 5:

* To no one's surprise, home equity holdings on a national basis got creamed during the past year. Homeowners lost an estimated $879.6 billion in net equity wealth -- that's the difference between the current market values of their houses and their current mortgage debt. Just in the first quarter of this year alone, estimated national equity losses totaled $399.1 billion.

* Americans' equity in their homes represented just 46.2% of their properties' market values during the first quarter. Put another way, total mortgage debt exceeded owners' equity and constituted almost 54% of total home values.

The Fed's estimate of a nearly $880-billion loss of home equity wealth may strike you as shocking, but look at that number with some recent perspective. During the housing boom, nearly $3 trillion in net equity was racked up in a few years as prices exploded in local markets with high levels of speculative investments powered in part by low interest rates and funny-money mortgages.

Here's a crucial fact, however: Depending on where you live or own property (and how long you've owned it), these wild gyrations of equity growth, followed by equity shrinkage, may not mean a lot, according to Jay Brinkmann, vice president for research and economics at the Mortgage Bankers Assn. and an expert on real estate cycles.

"I don't think numbers like an $880-billion equity loss are all that meaningful for most individual homeowners," he said.

The losses are highly concentrated. The Fed's equity decline numbers for the country as a whole "are really being dragged down disproportionately by the big drops in prices in California, Florida and a handful of other states," said Brinkmann. "Most markets haven't been hit anywhere near as hard."