Watching the Stock Market? Check the Value of Your Home for Good News.
While watching the stock market recently may have started to feel pretty challenging, checking the value of your home should come as welcome relief in this volatile time. If you’re an Oklahoma homeowner, your net worth got a big boost over the past few years thanks to rising home prices. And that increase in your wealth came in the form of home equity. Here’s how it works. Equity is the current value of your Oklahoma home minus what you owe on the loan. Because there was a significant imbalance between the number of homes available for sale and the number of buyers looking to make a purchase over the past few years, home prices appreciated substantially. And while rising inventory and mortgage rates have cooled the Oklahoma market some in recent months, home prices nationally remain strong. That’s why, according to the latest Homeowner Equity Insights from CoreLogic, the average homeowner equity has grown by $60,000 over the last 12 months. While that’s the national number, if you want to know what happened, on average, over the past year in your area, look at the map below from CoreLogic: Why This Is So Important Right Now Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), helps explain why this matters so much today: “. . . the decline in the stock market has dented overall net wealth. It has fallen by $6 trillion from the first to the second quarter. Only housing wealth has held on, with homeowners’ real estate wealth (home value minus mortgage balance) rising by $1.2 trillion.” While equity helps increase your overall net worth, it can also help you achieve other goals like buying your next Oklahoma home. When you sell your current house, the equity you built up comes back to you in the sale, and it may be just what you need to cover a large portion – if not all – of the down payment on your next home. Bottom Line There’s volatility in today’s stock market, but home equity is still incredibly strong. To find out just how much equity you have in your current Oklahoma home, let’s connect.
How Your Equity Can Grow Over Time
It’s true that record levels of home price appreciation have spurred significant equity gains for homeowners over the past few years. As Diana Olick, Real Estate Correspondent at CNBC, says: “The stunning jump in home values over the course of the Covid-19 pandemic has given U.S. homeowners record amounts of housing wealth.” That’s great for your home’s value over the last couple of years, but what if you’ve lived in your home for longer than that? You may be wondering how much equity you truly have. The National Association of Realtors (NAR) has done a study to calculate the typical equity gains over longer spans of time. The data they compiled could be enough to motivate you to move. Just remember, to find out how much equity you have in your specific home, you’ll want to get a professional equity assessment from a trusted real estate advisor. How Your Equity Grows Let’s start by establishing how you build equity in your home. While price appreciation is clearly a factor that can help boost your equity, you also build equity over time as you pay down your home loan. NAR explains: “Home equity gains are built up through price appreciation and by paying off the mortgage through principal payments.” Average Equity Growth over Time The study from NAR breaks down the typical equity gain over time (see graph below). It calculates the equity a homeowner potentially gained if they purchased the median-priced home 5, 10, or 30 years ago and still own it today. These six-figure numbers are impressive and certainly enough to help you fuel a move into your next home, but they’re not a promised amount. Remember, your own equity gain will be different. It depends on how long you’ve been in the house, your home’s condition, any upgrades you’ve made, your area, and much more. If you want to find out how much equity you have, partner with a trusted real estate professional for an equity assessment on your home. They can provide an expert opinion on what your house is worth today and how the equity you’ve gained over time can help you when you purchase your next home. It may be some (if not all) of what you need for your next down payment. Bottom Line If you’re thinking about selling your house and making a move, home equity can be a real game-changer, especially if you’ve been in your current home for a while. If you’re ready to find out how much equity you have, let’s connect.
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