If you’re a current homeowner, you should know your net worth just got a big boost. It comes in the form of rising home equity. Equity is the current value of your home minus what you owe on the loan. Today, you’re building that equity far faster than you may expect – and this gain is great news for you.
Here’s how it happened. Home values are on the rise thanks to low housing supply and high buyer demand. Basically, there aren’t enough homes available to meet this high buyer interest, so bidding wars are driving home prices up. When you own a home, the rising prices mean your home is worth more in today’s market. And as home values climb, your equity does too. As 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.”
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.
How Rising Equity Impacts You
In addition to building your overall net worth, equity can also help you achieve other goals, such as:
Remodeling/renovating your current home:When you pull some cash out of the equity of your home, you can tackle some of those long awaited projects you have always wanted for your home, like a new kitchen or bathroom, or even take care of any deferred maintenance items.
Buying your next home: 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.
Paying off debt: Erase those higher interest credit card, student loans, installment debts, and more using the equity in your house. With a cash out refinance, the total monthly payments for all the debts combined could be lower than paying them separately. It’s always worth exploring to see if you can save hundreds or even thousands every month in payments.
Selling a home: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 current home’s equity can help fuel your move.
“The best investment you can make is an investment in yourself…”Warren Buffet
Equity can be a real game-changer. To find out just how much equity you have in your home and how you can use it to fuel your next project, home purchase, debt elimination plan, or to invest in yourself in other ways, let’s connect so you can get a professional equity assessment report on your house.
If you are thinking about selling, buying, or refinancing a home this year, there are opportunities for you to take that next step. When you rely on a trusted professional for information and allow me to be your guide, you can make the best decisions for you and your family. Let’s connect to explore your opportunities.
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Article content courtesy of Keeping Current Matters.