A home is one of the biggest assets one can have. It’s proof of your hard work but also it represents your largest financial asset. If you are a homeowner, know that your net worth has just gotten a boost from your rising home equity. What is Equity? It is the value of your home less than what you owe on your loan. Equity is increasing faster than expected with the current market due to rising home values.
How did this happen? Values are on the rise due to 2 factors:
- Low inventory
- High-buyer demand
Basically, there aren’t enough homes in the market to meet the buyer’s demand so bidding wars drive home prices up. And when I say up, I mean thousands of dollars up. As your home value increases so does your home’s equity.
Dr. Frank Nothaft, Chief Economist at CoreLogic 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”
CoreLogics Home Equity Insights showed how much the increasing home value drove homeowner equity up. According to the report, Soaring home prices have pushed up the average California homeowner’s equity by $116,000 in the past year which has one of the largest average equity gains and about $55,300 in general— tops in the nation, CoreLogic says.
Why is this a piece of good news for you?
- It builds your overall net worth
- It can cover most if not all of the downpayment needed for your next home
- If you’ll be smart and hire the right agent, there might still be a little bit you can save from that equity even after buying your new home
If you’ve been holding off selling and worried that your next home may price you out because of today’s home appreciation, your equity along with finding the right agent to represent you can fuel your move. Equity can be a real game-changer, connect with me your trusted real estate expert, to make sure that we maximize your equity and put you on the winning side.
Ref: https://www.corelogic.com/