How Has Your Home’s Equity Affected Your Net Worth?
Here’s why homeowners are rejoicing about the extra equity in their homes.
If you’re a homeowner, you should know that your net worth has received a huge boost in the form of rising home equity. Your home equity is measured by the current value of your house minus what you owe on the loan.
You’re building that equity far faster these days than you may expect, and this is good news if you’ve been thinking about selling your home. Values are on the rise thanks to low supply and high demand. Without enough homes available to meet demand, bidding wars among buyers are driving prices up across the board. As home values climb, your equity does too.
As Dr. Frank Nothaft, Chief Economist at CoreLogic, explains: “Home prices rose 18% in 2021 in the CoreLogic Home Price Index. That’s the largest annual gain recorded in its 45-year history, generating a big increase in home equity wealth.”
"As home values climb, your equity does too."
These insights shed some light on just how much rising home values have boosted equity. According to that report, the average homeowner has gained over $55,300 in equity over the last 12 months.
Want to know what’s happening in your area? At 2:00 in the video above, you can see a breakdown of the average year-over-year equity growth for each state based on that data. If you’d like an equity analysis for your home, you can get one here. In addition to building your net worth, equity can help you achieve other goals like buying your next home or vacation property.
You pull your equity out of your house when you sell. That extra cash may be exactly what you need to cover most if not all of the down payment for your next home.
If you’re hesitant to sell because you’re worried about being priced out of your next home, rest assured that your equity can help fuel your move. The bottom line is that equity can be a real game-changer if you’ve been thinking about making a move.
If you have any questions about your home’s equity, what it might do in 2022, or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.