Equity Gains for Homeowners Today
Even though home price appreciation has recently slowed, today's homeowners have significant equity. If you own a home, rising home prices have increased your net worth in recent years. Even as the market cools, here's what it means for you.
How Equity Has Grown in Recent Years
Home prices have risen significantly in recent years as a result of the disparity between the number of homes for sale and the number of homebuyers in the market.
And, while price growth has slowed this year, that doesn't mean you've lost all of your home's equity. In fact, the latest Homeowner Equity Insights report from CoreLogic finds the average homeowner’s equity has grown by $34,300 over the past year alone.
And if you’ve been in your home longer than that, chances are you have even more equity than you realize.
While that’s the national number, if you want to know what happened in your area, look at the map below from the Federal Housing Finance Agency (FHFA). It shows on average how much home prices have risen over the past five years, which has been a major driver behind equity growth.
Why This Is So Important Right Now
While equity contributes to your overall net worth, it can also help you achieve other goals, such as purchasing your next home. When you sell your current home, the equity you've built up is returned to you, and it could be enough to cover a large portion - if not all - of the down payment on your next home.
So, if you've been putting off selling, now might be the time to figure out how much equity you have and how it can help fuel your next move.