The Benefits Of Growing Equity In Your Home

Dated: 08/16/2019

Views: 13

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

Matthew Hoagland

My name is Matthew Hoagland, Team Leader of The Hoagland Real Estate Group of RE/MAX Premier Properties. I would like to thank you for considering our services in your search for a new home, listing y....

Latest Blog Posts

Louisville Open Houses October 11 13

#OPENHOUSELOUISVILLEHere is a list of all Open Houses from the MLS this weekend. Be sure to consult with your Realtor if these homes are actually OPEN this weekend, or, CALL ME if you do not

Read More

62 Of Buyers Are Wrong About Down Payment Needs

62% of Buyers Are Wrong About Down Payment NeedsAccording to the ‘2019 Home Buyer Report’ conducted by Nerdwallet, many first-time buyers still believe they need a 20% down

Read More

3 Signs The Housing Market Is On The Rebound

3 Signs the Housing Market Is on the ReboundThe residential real estate market has been plodding along for most of the year. However, three recent reports show the market may be on the verge of a

Read More