Growing Equity in Your Home

Dated: September 10 2019

Views: 161

The Benefits of Growing Equity in Your Home

The Benefits of Growing Equity in Your Home | MyKCM

Over the last couple of years, we’ve heard quite a bit about rising home prices. Today, expert projections still forecast continued growth, just at a slower pace. One of the often-overlooked benefits of rising home prices is the positive impact they have on home equity. Let’s break down three ways this is a win for homeowners.

1. Move-Up Opportunity

With the rise in prices, homeowners naturally experience an increase in home equity. According to the Homeowner Equity Insights from CoreLogic,

“In the first quarter of 2019, the average homeowner gained approximately $6,400 in equity during the past year.”

This increase in profit means if homeowners decide to sell, they’ll be able to put their equity to work for them as they make plans to move up into their next home.

2. Gain in Seller’s Profit

ATTOM Data Solutions recently released their Q2 2019 Home Sales Report, indicating the seller’s profit jumped at one of the fastest rates since 2015. They said:

“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.”

Looking at the amount paid when they bought their homes, and then the amount they received after selling, we can see that some homeowners were able to walk away with a significant gain.

3. Out of a Negative Equity Situation

Negative equity occurs when there is a decline in home value, an increase in mortgage debt, or both. Many families experienced these challenges over the last decade. According to the same report from CoreLogic,

“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.”

The good news is, many families have moved beyond a negative equity situation, and no longer owe more on their mortgage than the value of their home.

Bottom Line

If you’re a current homeowner, you may have more equity than you realize. Your equity can open the door to future opportunities, such as moving up to your dream home. Let’s get together to discuss your options and start to put your equity to work for you.

Blog author image

Ellie and Bob Bunting

Ellie has returned to real estate sales after spending the last 40 years teaching English at Florida SouthWestern State College in Fort Myers She has teamed up with her husband, Bob, who has been a....

Latest Blog Posts

Will the Real Estate Market Continue to Grow?

What Do Experts See on the Horizon for the Second Half of the Year?As we move into the latter half of the year, questions about what’s to come are top of mind for buyers and sellers. Near

Read More

Who was WP Franklin?

Camping at the LocksRecently, my husband and I took our motor home to the WP Franklin campground.  Located in Olga, the campground has 29 RV sites and 8 boat sites with 50 amp electric and

Read More

Are We in a Housing Bubble ???

Are We in a Housing Bubble? Experts Say No.The question of whether the real estate market is a bubble ready to pop seems to be dominating a lot of conversations – and everyone has an opinion.

Read More

Buying Today--Taking the Plunge

Buying a Home Is Still AffordableThe last year has put emphasis on the importance of one’s home. As a result, some renters are making the jump into homeownership while some homeowners are re

Read More