What The Average Homeowner Has In Equity And How To Use It
If you're a current homeowner, you should be aware that your net worth has increased significantly. It manifests itself in the form of increasing home equity. The current worth of your house less the amount you owe on the loan is your equity. Today, you're accumulating that equity far more quickly than you may imagine - and this is fantastic news for you.
This is how it went down. Due to a lack of housing supply and high buyer demand, home prices are rising. Bidding wars are driving up property prices because there aren't enough properties available to fulfill the strong demand. Rising prices suggest that your home is worth more in today's market if you own one. And when the value of your property rises, so does your equity. Dr. Frank Nothaft, CoreLogic's Chief Economist, explains:
“Home prices rose 18% during 2021 in the CoreLogic Home Price Index, the largest annual gain recorded in its 45-year history, generating a big increase in home equity wealth.”
The latest Homeowner Equity Insights from CoreLogic shed light on just how much rising home values have boosted homeowner equity. According to that report, the average homeowner’s equity has grown by $55,300 over the last 12 months.
Want to know what’s happening in your area? Here’s a breakdown of the average year-over-year equity growth for each state based on that data.
Will Increasing Equity Affect You?
Equity can help you reach other goals, such as buying your next house, in addition to increasing your overall net worth. This is how it will work: once you sell your home, the equity you've built up will be returned to you.
In a market where you’re gaining so much equity, it may be just what you need to cover a large portion – if not all – of the down payment on your next home. So, if you’ve been holding off on selling and worried about being priced out of your next home because of today’s home price appreciation, rest assured your equity can help fuel your move.
It might be precisely what you need to finance a big chunk – if not all – of the down payment on your next home in a market where you're accumulating so much equity. So, if you've been putting off selling because you're scared about getting priced out of your next house due to today's rising property prices, be assured that your equity can help you make the transition.
If you're thinking about making a move, equity can be a game-changer. Let's connect so you can obtain a professional equity assessment report on your property to see how much equity you have and how you may utilize it to fund your next purchase.