If you own a home, your net worth probably just went up a lot because your home equity is going up. Equity is how much your home is worth now minus how much you still owe on the loan. And because home prices have been going up recently, you're building equity much faster than you might think. Here's how it works.
Home prices are going up because there aren't enough homes for sale to meet the demand for them. That means that your home is in high demand and is worth more on the market right now. As CoreLogic's President and CEO, Patrick Dodd, says:
"Price growth is the most important factor in building home equity wealth.... This has led to the largest one-year gain in average home equity wealth for owners...."
Your equity has probably gone up because the value of your home has probably gone up so much. CoreLogic's latest Homeowner Equity Insights report says that over the past year, the average homeowner's equity has grown by $64,000.
Even though that is the number for the whole country, you can use the map below to find out what's going on in your area. Using data from CoreLogic, it shows how much equity has grown on average from one year to the next in each state.
The Chance Your Increasing Home Equity Gives You
Equity can help you reach other goals, like buying your next home, as well as help you build your overall net worth. When you sell your current home, you get back the equity you've built up. In a market where homeowners are gaining so much equity, it may be just what you need to cover most or all of the down payment on your next home.
So, if you've been waiting to sell or are worried that you won't be able to afford your next home because of how much home prices are going up right now, you can rest assured that your equity can help you move.
Bottom Line
If you want to move, the equity you've built up in your home can make a big difference. Let's talk so you can get a professional report on your home's equity. This will tell you how much equity you have and how you can use it to pay for your next purchase.
