Equity on the up and up
It’s a good time to be a homeowner. According to new data, American homeowners have gained more than $16,000 in equity over the past year — and even more growth is on the horizon.
Increased equity means increased options
According to the latest Home Equity Report from CoreLogic, U.S. homeowners have gained $16,300 in equity in the last four quarters – a 13.3 percent jump over last year. Homeowners gained $1 trillion in wealth in the form of home equity in the past year alone.
More home equity equals more options for homeowners, opening the door to home equity lines of credit, cash-out refinances and other money-generating financial products. It also means more profits when it comes time to sell.
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Frank Nothaft, chief economist at CoreLogic, equates the high rate of equity growth with rising home prices.
“Home price growth has accelerated in recent months, helping to build home equity wealth and lift underwater homeowners back into positive equity,” Nothaft said. “The CoreLogic Home Price Index grew 6.7 percent during the year ending March 2018 – the largest 12-month increase in four years. Likewise, the average growth in home equity was more than $15,000 during 2017 – the most in four years.”
In just the first quarter of 2018 alone, 84,000 homeowners regained positive equity. Just under 5 percent of all mortgaged properties are currently underwater.
Where equity has risen most
According to CoreLogic’s data, equity has jumped the most in the Western part of the country.
In Washington, homeowners gained about $44,000 in home equity over the last year, while those in California gamed $51,000. These states will likely see continued equity growth in the coming years, too.
“In the far Western states, equity gains are fueled by a long run in home price escalation,” said Frank Martell, president and CEO of CoreLogic. “With strong economic growth and higher purchase demand, we expect these trends to continue for the foreseeable future.”
Other states to see high year-over-year growth in equity were Maine ($20K), Idaho ($25K), Montana ($20K), Nevada ($30K), Utah ($28K), Colorado ($22K), Hawaii ($33K) and Massachusetts ($24K).
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