The Benefits of Growing Equity in Your Home
Over the last couple of years, we’ve heard quite a bit about rising home prices. Today, expert projections still forecast continued growth, just at a slower pace. One of the often-overlooked benefits of rising home prices is the positive impact they have on home equity. Let’s break down three ways this is a win for homeowners.
1. Move-Up Opportunity
With the rise in prices, homeowners naturally experience an increase in home equity. According to the Homeowner Equity Insights from CoreLogic,
“In the first quarter of 2019, the average homeowner gained approximately $6,400 in equity during the past year.”
This increase in profit means if homeowners decide to sell, they’ll be able to put their equity to work for them as they make plans to move up into their next home.
2. Gain in Seller’s Profit
ATTOM Data Solutions recently released their Q2 2019 Home Sales Report, indicating the seller’s profit jumped at one of the fastest rates since 2015. They said:
“A look at the national numbers showed that U.S. homeowners who sold in the second quarter of 2019 realized an average home price gain since the original purchase of $67,500…the average home seller gain of $67,500 in Q2 2019 represented an average 33.9 percent return as a percentage of the original purchase price.”
Looking at the amount paid when they bought their homes, and then the amount they received after selling, we can see that some homeowners were able to walk away with a significant gain.
3. Out of a Negative Equity Situation
Negative equity occurs when there is a decline in home value, an increase in mortgage debt, or both. Many families experienced these challenges over the last decade. According to the same report from CoreLogic,
“U.S. homeowners with mortgages (roughly 63% of all properties) have seen their equity increase by a total of nearly $485.7 billion since the first quarter 2018, an increase of 5.6%, year over year.
In the first quarter of 2019, the total number of mortgaged residential properties with negative equity decreased…to 2.2 million homes, or 4.1% of all mortgaged properties.”
The good news is, many families have moved beyond a negative equity situation, and no longer owe more on their mortgage than the value of their home.
If you’re a current homeowner, you may have more equity than you realize. Your equity can open the door to future opportunities, such as moving up to your dream home. Let’s get together to discuss your options and start to put your equity to work for you.
What FICO® Score Do You Need to Qualify for a Mortgage? While a recent announcement from CNBC shares that the average national FICO® score has reached an all-time high of 706, the good news for potential buyers is that you don’t need a score that high to qualify for a...
What Is the Cost of Waiting Until Next Year to Buy? Some Highlights: The “cost of waiting to buy” is defined as the additional funds necessary to buy a home if prices and interest rates were to increase over a period of time. Freddie Mac forecasts interest rates will...
Is Your House “Priced to Sell Immediately”? In today’s real estate market, more houses are coming to market every day. Eager buyers are searching for their dream homes, so setting the right price for your house is one of the most important things you can do. According...
Utah had the second highest house-price appreciation of all states in the second quarter year-over-year
Utah had the second highest house-price appreciation of all states in the second quarter year-over-year Utah had the second highest house-price appreciation of all states in the second quarter year-over-year, according to a new report by the Federal Housing Finance...
What Will Home Prices Look Like Over the Next Few Years? September 19th, 2019 Home prices will continue to rise throughout 2023. This means that now is a great time to sell! If you're thinking of listing your home, let's get together to determine your best move.
Utah Realty 4 Reasons to Sell This Fall Some Highlights: Buyers are active in the market and often competing with one another for available listings. Housing inventory is still under the 6-month supply found in a normal housing market. Homes are still selling...
Experts Predict a Strong Housing Market for the Rest of 2019 We’re in the back half of the year, and with a decline in interest rates as well as home price and wage appreciation, many are wondering what the predictions are for the remainder of 2019. Here’s what some...
Utah Mortgage Rates at a 3 Year Low