Key Takeaways:
- Today’s historic low-inventory housing market created an equity windfall
- Homeowners stand to gain record equity profits when they sell
- Our team knows how to help get the most for your home – contact us!
Equity is the present market value of your home minus what you still owe on your loan. If you’re currently a homeowner, rising home equity has undoubtedly boosted your net worth over this last year. Today, your home value is increasing far faster than you may have expected, and this gain is excellent news for you!
Here’s why equity increased so quickly
Home values have dramatically risen thanks to the historic low housing inventory that has greeted Millennials as they entered the housing market for their first time. This record imbalance between low housing supply and high buyer demand has resulted in highly competitive bidding wars. These rising prices mean your home is worth more in today’s market, and as home values climb, so too does your equity:
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.
Dr. Frank Nothaft, Chief Economist at CoreLogic
According to that report, the average homeowner’s equity has grown by $55,300 over the last 12 months.
Want to know how home values have been impacted in your area? Here’s a breakdown of each state’s average year-over-year equity growth based on that data:
How the increase in home equity impacts you
When you sell your house, the equity that you have built up over the years comes back to you in the sale in the form of a profit. Besides building your net worth, equity can also help you achieve other goals you may have, such as buying your next home. And in a market like this one where you’re gaining so much equity, equity profits may be just what you need to cover a significant portion of the down payment on your next home. So, if you’ve been holding off on selling and are worried about being priced out of your next home because of today’s hot housing market, rest assured that your equity can help fuel your next move.
How Much Equity Do You Have?
Equity profits like we’re seeing in today’s real estate market are a massive opportunity. To find out just how much equity you have in your home and how you can best use it to fuel your next purchase, contact Linda Craft & Team today at 919.235.0007 to make your biggest move yet.