By Vanessa Saunders, MBA, MIMC , Broker Owner, Global Property Systems Real Estate.
We blogged yesterday how homeowners with equity in their homes (Equity is an appreciation of value caused by either payments on principal or the increased market value of a property) has kept people from selling their home. We pointed out that homeowners who are choosing to sit rather than move are impacting the Hudson Valley real estate market by causing a lack of homes (real estate inventory) for sale. But don’t get us wrong. Equity isn’t always a bad thing.
Turns out it’s great for homeowners.
As average homeownership lengthens and home prices go up, equity, which is a form of forced savings, can be applied toward the purchase of a new home. A recent study by CoreLogic https://www.corelogic.com/insights-download/homeowner-equity-report.aspx
“Over the past 10 years, the equity position of homeowners has positively changed as a result of more than eight years of rising home prices. As the economy climbed out of the recession in the first quarter of 2010, 25.9% or 12.1 million homes were still underwater, compared to the first quarter of 2020 when the negative equity share was at 3.4%, or 1.8 million properties. Borrowers have seen an aggregate increase of $6.2 trillion in home equity since the first quarter of 2010 and the average homeowner has gained about $106,100 in equity.”
Having significant equity in a home lets owners sell at a profit and buy a larger or better home for their needs. The average home sale price increase from last year gave its sellers a profit of over $75,000, up from $66,500 in Q1 of last year.
With average home sale profits growing, it’s a great time to leverage your equity and make a move, especially while the inventory of houses for sale and mortgage rates are historically low. If you’re considering selling your house, CONTACT a Global Property Systems local area expert today to see how much you can afford to put toward your next dream home!