Home Equity Continues to Soar

Despite the pandemic’s impact on the economy, home prices are not only still holding strong, but continue to show signs of strength.  A recent Home Equity Report from CoreLogic showed that US homeowners that have mortgages, which accounts for about 63% of all properties, have seen the equity in their home increase by 10.8% from Q3 this year versus Q3 last year. This increase represents a total equity gain of about $1 trillion and breaks down to about $17,000 per homeowner.  This also marks the largest average gain in equity since the beginning of 2014.  
Frank Nothaft, Chief Economist for CoreLogic said, “Over the past year, strong home price growth has created a record level of home equity for homeowners.” He continued to say, “The average family with a home mortgage loan had $194,000 in home equity in the third quarter. This provides an important buffer to protect families if they experience financial difficulties, and is one reason for the generational-low in foreclosure rates reported in September."

Going forward, CoreLogic forecasts that homes will continue to appreciate next year by 1.9%.  Other analysts are forecasting even stronger gains closer to 5-6%.  Home price appreciation is certainly supported by the fact that supply levels are around 20% less than where they were last year, even with demand levels at all-time highs.

Whether you want to tap into your equity for home renovations, refinance to get rid of mortgage insurance, or purchase a home to take advantage of appreciation going forward, this is a great time to speak with an Advisors Mortgage Loan Officer who can help you work the numbers and come up with a plan.