The Average U.S. Homeowner Gained $56,700 in Equity over the Past Year
Your equity is the current value of your home minus what you owe on the loan. So, as home values climb, your equity does too. Right now there aren’t enough homes on the market to meet buyer demand, so bidding wars and multiple offers are driving prices up. This is projected to continue.
Dr. Frank Nothaft, Chief Economist at CoreLogic, explains it like this:
“Home price growth is the principal driver of home equity creation. The CoreLogic Home Price Index reported home prices were up 17.7% for the past 12 months ending September, spurring the record gains in home equity wealth.”
Curious how your state stacks up against those in other states? Check out the map below to find out the average equity gain for each state through the third quarter of 2021:
How Rising Equity Impacts You
If you’re already a homeowner, equity not only builds your wealth, as part of your overal plan. It works like this: when you sell your house, the equity you built up comes back to you in the sale. You can use those proceeds to fuel your next move, including putting a non-contingent offer in on a home.
If you’re thinking about becoming a homeowner, understanding the importance of equity can help you realize why homeownership is a worthwhile goal. It builds your wealth, and is part of your overall lifestyle and financial goals.
Bottom Line
Whether you’re a current homeowner or you’re ready to become one, it’s important to know how equity works and why it matters. Equity growth is never guaranteed (remember the recession?) but holding off on using your current equity is an important thing to think about, as it shrinks and expands alongside the market.
We'll do free custom home value analysis for you so you can track your home's value anytime. This isn't a Zestimate (Montana is a non-disclosure state, so they don't have access to our sold pricing data). Just contact us and we'll start working on it for you.