Rising Prices Push Home Equity to Highest Level in 10 Years

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Homes with a mortgage gained an average of $51,500 in equity in the second quarter, an increase of 29.3% from the April-June quarter last year, according to real estate information company CoreLogic. That’s the highest quarterly average gain in home equity since the second quarter of 2010, the firm said.

That works out to nearly $3 trillion in equity gained by U.S. homeowners with a mortgage, which is about 63% of all homes, CoreLogic said. Average homeowner equity jumped nearly 20% in the first quarter from a year earlier.

In its most recent quarterly housing forecast, mortgage buyer Freddie Mac envisions home prices growing 5.3% next year, down from a projected 12.1% increase in 2021.

If those home price outlooks hold, it would translate into a less torrid pace for homeowner equity growth next year. Still, the outsized growth in homeowner equity this year will have ripple effects for the broader economy, and the housing market. Rising homeowner equity creates a buffer for borrowers against potential financial hardship, such as job loss. And it can give homeowners financial flexibility to borrow against their equity to pay off high-interest debt or finance large purchases, such as home improvement projects, which can give a boost to the economy.

“It is good for wider economic growth, but there’s an ugly side to today’s level of pricing,” Wolf said. “Those who have chosen not to purchase a home or have been unable to are finding it very hard to enter the market now, and in a lot of cases these individuals are missing out on wealth accumulation.”

Here in Southwest Florida we are just about to start the main home buying season. We start with very low supply and are anticipating a very strong winter season as buyers from Europe and Canada, who were almost entirely absent last year, return, adding fuel to existing demand.

PLease contact me to learn how I can help you in your search.

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Andrew Oliver
REALTOR®| Market Analyst | DomainRealty.com

Naples, Bonita Springs and Fort Myers
Andrew.Oliver@DomainRealtySales.com
m. 617.834.8205
www.AndrewOliverRealtor.com
www.OliverReportsFL.com
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Market Analyst | Team Harborside | teamharborside.com
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945

www.OliverReportsMA.com
Andrew.Oliver@SothebysRealty.com

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