In a year that was financially devastating for many Americans, there is still some good news for most homeowners as we head into 2021.
Last week, CoreLogic released its 2020 3rd Quarter Homeowner Equity Insights report, which reveals four major findings:
- U.S. homeowners with mortgages have seen their equity increase by a total of $1 trillion since the third quarter of 2019.
- The average homeowner gained approximately $17,000 in equity over the past year.
- This is a 10.8% increase in equity over last year.
- The average household with a mortgage now has $194,000 in home equity.
This has given many homeowners the ability to redesign their homes to meet their changing needs. Frank Martell, President and CEO of CoreLogic, explains in the report:
“The housing market has remained a strong pillar in an otherwise tumultuous economic year. A sharp rise in demand, spurred by record-low interest rates, continues to bolster homeowner equity. And with many people now spending more time than ever before at home, some homeowners have tapped into their strengthening equity to fund renovations.”
This build-up in equity also gives more options to homeowners who have been financially impacted by the pandemic.
Today, homeowners have the power to sell and walk away with their equity in the form of cash or as a down payment toward a more affordable house. Frank Nothaft, Chief Economist for CoreLogic, addresses the issue in the report:
“Over the past year, strong home price growth has created a record level of home equity for homeowners…This provides an important buffer to protect families if they experience financial difficulties and is one reason for the generational-low in foreclosure rates reported.”
Take a look at the map below showing equity gains by state:
This gain in home equity is a blessing for homeowners in these trying times, and it seems that the next two years will continue to reward those who own a home.
Last week, the National Association of Realtors (NAR) held their 2020 Real Estate Forecast Summit. At the summit, they shared the results of a recent survey of 23 economic and housing market experts. The median forecast among the experts called for home values to increase further by 8% in 2021 and 5.5% in 2022.
Source: Keeping Current Matters
Conclusion
If you are a homeowner and are worried about your financial situation heading into the new year, there is a good chance you may find some relief through accessing your home equity.
Whether through a cash-out refinance to pull out your equity to pay off other debts, a simple rate-and-term refinance to lower your monthly mortgage payment, or evening selling your house – there are many options available to you. If you have significant equity in your home, you should not have to worry about finances.
If you would like to learn more about the options available to you to access your home equity, or would simply like to find out how much equity you have in your home, fill out the form below to request a consultation with one of our mortgage advisors.
