If you own a home, your net worth likely just got a big boost thanks to rising home equity.Equity is the current value of your home minus what you owe on the loan.And today, based on recent homeprice appreciation, youre building that equity far faster than you may expect heres how it works.
Because theres an ongoing imbalance between the number of homes available for sale and the number of buyers looking to make a purchase, home prices are on the rise. That means your home is worth more intodays marketbecause its in high demand. As Patrick Dodd, President and CEO ofCoreLogic,explains:
Price growth is the key ingredient for the creation of home equity wealth. . . . This has led to the largest one-year gain in average home equity wealth for owners. . . .
Basically, because your home value has likely climbed so much, your equity has increased too. According to the latestHomeowner Equity InsightsfromCoreLogic,the average homeowners equity has grown by $64,000 over the last 12 months.
While thats the nationwide number, if you want to know whats happening in your area, look at the map below. It breaks down the average year-over-year equity growth for each state using the data fromCoreLogic.
The Opportunity Your Rising Home Equity Provides
In addition to building your overall net worth, equity can also help you achieve other goals like buying your next home. When you sell your current house, the equity you built up comes back to you in the sale. In a market where homeowners are gaining so much equity, it may be just what you need to cover a large portion if not all of the down paymenton yournext home.
So, if youve been holding off onsellingor youre worried about being priced out of your next home because of todays ongoing home price appreciation, rest assured your equity can help fuelyour move.
Bottom Line
If youre planning to make a move, the equity youve gained can make a big impact. To find out just how much equity you have in your current home and how you can use it to fuel your next purchase, connect with a Seven Gables Advisor so you can get a professional equity assessment report on your house.
