The last couple years many homeowners have reported significant rises in their home equity. Today, they are still expected to rise, just at a slower rate according to Keeping Current Matters.
Many people forget the benefits to rising home prices such as growth in equity. Below are 3 benefits for homeowners experiencing a growth in equity.
1. Move-Up Opportunity
Home prices have been rising ever since the recession ended which means homeowners have been gaining equity – and most likely more than they realize if they haven’t spoken to a real estate expert in the past year. The Homeowner Equity Insights from CoreLogic shows “The national average in the first quarter of 2019 homeowners gained around $6,400 in equity.”
This increase in equity can help current homeowners make a move up in their next home purchase if they are thinking of selling and repurchasing a home in a higher price point.
2. Gain in Seller’s Profit
In the past year on average, sellers have been seeing a large profit gain from the amount paid to purchase their home and then the amount they received after selling. In the 2nd Quarter 2019 Home Sales Report by ATTOM Data Solutions, it shows seller’s profit grew at one of the fastest rates since 2015.
“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.”
Whether using the profit as a down payment on a new purchase, or even downsizing and saving the profit, it’s a great time to sell if you’ve been thinking about it and waiting for the right time. Studies are showing it’s a great time if you want to make a profit – and who doesn’t want to make money?
3. Out of a Negative Equity Situation
Negative equity means you owe more on your home than you can sell it for. In the Great Recession, this was happening to many homeowners when the housing market crashed. Since then, home values have risen back to where they should be had they maintained the national average of 3.6% increase in value,
and now less homeowners are experiencing negative equity, and instead, an overabundance of equity. CoreLogic reported
““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.”
What Does All of This Mean?
If you currently own a home, there is a high chance you have more equity than you realize. Your equity can provide many opportunities, from moving up to your dream home, or selling and having more in your savings. The best way to find out where you stand is contacting your real estate professional to discuss your options and let your equity work for you.
Team Honeycutt would love to be your trusted real estate professional to guide you through the market and help you find what options you have. Contact Team Honeycutt at 704-721-7130 or email firstname.lastname@example.org to talk with one of our great Real Estate Agents local to Cabarrus County and surrounding areas.
Main Source: www.keepingcurrentmatters.com