We’ve all been watching the sale prices of homes go up, but you don’t have to be a Seller to benefit. The average American homeowner saw an average equity growth of $64,000 over the past 12 months.
That’s not a typo. If you own a home, your net worth likely just got a huge boost thanks to rising home equity. Meaning what, exactly? Equity is the current value of your home minus what you owe on the loan. Based on current home price appreciation, homeowners are building that equity faster than expected – and here’s how that works.
We’re currently seeing a massive imbalance between the number of homes available for sale and the number of buyers looking to purchase, and because of this home prices are on the rise. This means, in really simple terms, your home is worth more in today’s market than it was previously because it’s in very high demand. Yup, that high school economics is finally paying off with a real life example of the laws of supply and demand.
Patrick Dodd, CEO of CoreLogic says:
“Price growth is the key ingredient for the creation of home equity wealth… This has led to the largest one-year gain in average home equity wealth for owners…”
With your home value going up, it’s no surprise your equity has, too.
While this is a nationwide average of $64,000 in equity growth over the past 12 months, you can take a look at the map below to see where other states fall in the spread. This data comes from CoreLogic’s Home Equity Insights.
Of course, these numbers greaty vary by county, and even town, so if you’re looking for a pulse on your home value, you know who to call (*cough* Catherine & Tiffany! *cough*). Home equity growth provides so many opportunities such as building your net worth, leveraging the equity, or leap-frogging to your next property. All that equity you’ve earned becomes your profit when you sell. Taking this into consideration might just be what you need to cover a large portion, or maybe even all, of the down payment for your next home. You can also use that equity to secure a home equity line of credit if home improvements, college educations, or a life change calls for it.
If you’ve been holding off on selling your home due to the volatile nature of the current market, or because you’ve been worried about being priced out due to ongoing price appreciation – rest assured, these recent boosts in home values may just work in your favor. Before you make any decisions, don’t hesitate to give us a call to discuss all your ideas an options. We’re here for all types of Real Estate Advice.