Within the last few years, there’s been a lot of talk about rising housing prices. Market experts forecast continuous growth, albeit at a slower rate. But home price increases have some benefits that are frequently overlooked — as housing prices rise, so does home equity.
Homeowners and new homebuyers may experience three distinct advantages because of this home equity increase.
What could you do with an extra $6,400?
Here are just three examples of how homeowners are winning as housing prices increase:
1. Leverage equity & move up to a new place.
When housing prices rise, homeowners naturally see a surge in home equity. As CoreLogic’s recent Homeowner Equity Insights report explains:
“In the first quarter of 2019, the average homeowner gained approximately $6,400 in equity during the past year.”
With this profit increase, any homeowner who’s preparing to sell could make their equity work for them when they move up to a higher price range.
2. Sell your house & see more profit.
ATTOM Data Solutions’ latest Q2 2019 Home Sales Report indicates that home sellers’ profit is growing faster than it has since 2015. The report says:
“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.”
Compared to what you paid when you bought your house, and the amount you might receive once you list, it’s possible that you could walk away from your home sale with a significant equity gain.
How much equity are you working with? And how much could you profit when you sell? Contact your local loan officer and find out.
3. Reverse negative equity & start building wealth.
Both a home value decline and a mortgage debt increase can contribute to negative home equity. A number of families have faced this challenge in the last 10 years.
In the same report, CoreLogic also states:
“U.S. homeowners with mortgages (roughly 63 percent 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 percent, 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 percent of all mortgaged properties.”
This has helped many families move out of negative equity, and they no longer have to worry about owing an amount on their mortgage that exceeds the value of their house.
Did we mention your equity has probably increased?
Imagine your surprise when you find out you’re sitting on more equity than you realized. You could use your home equity gains to open the door to new opportunities — and to fund your future, whether it’s for debt payoff, education, weddings, vacations, or home upgrades. Your equity needs to work for you: Click here to learn more.
For educational purposes only. Please contact your qualified professional for specific guidance.
Sources are deemed reliable but not guaranteed.