Homeowners Still Have Positive Equity Gains over the Past 12 Months
If you’re an Oklahoma homeowner, your net worth got a big boost over the past few years thanks to rapidly rising home prices. Here’s how it happened and what it means for you, even as the market moderates. Equity is the current value of your 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 home price appreciation has moderated this year, and even depreciated slightly in some overheated markets, that doesn’t mean you’ve lost all the equity you gained during the pandemic frenzy. To prove you still have equity you can use, the latest Homeowner Equity Insights from CoreLogic finds the average homeowner equity has actually grown by $34,300 over the past 12 months. That’s right, despite the headlines, the average homeowner still gained positive equity over the last year in just about every market. While the gains aren’t as dramatic as they were in the previous quarter due to home price moderation, they’re still significant. And if you’ve been in your home for longer than a year, chances are you have even more equity than you realize. While that’s the national number, if you want to know what happened over the past year in your area, look at the map below from CoreLogic: Why This Is So Important Right Now While equity helps increase your overall net worth, it can also help you achieve other goals, like buying your next home. When you sell your current Oklahoma house, the equity you’ve 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. So, if you’ve been holding off on selling because you weren’t sure what the headlines meant for your bottom line, rest assured you’ve still gained equity in recent years, and it can help fuel your move. Bottom Line If you’re planning to make a move, the equity you’ve gained over time can make a big impact. To find out just how much equity you have in your current Oklahoma home and how you can use it to fuel your next purchase, let’s connect.
3 Ways You Can Use Your Home Equity
If you’re a homeowner, odds are your equity has grown significantly over the last few years as Oklahoma home prices skyrocketed and you made your monthly mortgage payments. Home equity builds over time and can help you achieve certain goals. According to the latest Equity Insights Report from CoreLogic, the average borrower with a home loan has almost $300,000 in equity right now. As you weigh your options, especially in the face of inflation and talk of a recession, it’s important to understand your assets and how you can leverage them. A real estate professional is the best resource to help you understand how much home equity you have and advise you on some of the ways you can use it. Here are a few examples. 1. Buy a Home That Fits Your Needs If you no longer have the space you need, it might be time to move into a larger home. Or it’s possible you have too much space and need something smaller. No matter the situation, consider using your equity to power a move into a home that fits your changing lifestyle. If you want to upgrade your Oklahoma house, you can put your equity toward a down payment on the home of your dreams. And if you’re planning to downsize, you may be surprised that your equity may cover some, if not all, of the cost of your next home. A real estate advisor can help you figure out how much equity you have and how you can use it toward the purchase of your next home. 2. Reinvest in Your Current House According to a recent survey from Point, 39% of homeowners would invest in home improvement projects if they chose to access their equity. This is a great option if you want to change some things about your living space but you aren’t ready to make a move just yet. Home improvement projects allow you to customize your home to suit your needs and sense of style. Just remember to think ahead with any updates you make, as some renovations add more value to your Oklahoma home and are more likely to appeal to future buyers than others. For example, a report from the National Association of Realtors (NAR) shows refinishing or replacing wood flooring has a high cost recovery. Lean on a local professional for the best advice on which projects to invest in to get the greatest return on your investment when you sell. 3. Pursue Your Personal Goals In addition to making a move or updating your Oklahoma house, home equity can also help you achieve the life goals you’ve dreamed of. That could mean investing in a new business venture, retiring or downsizing, or funding an education. While you shouldn’t use your equity for unnecessary spending, leveraging it to start a business or putting it toward education costs can help you achieve other lifelong goals. Bottom Line Your equity can be a game changer. If you’re unsure how much equity you have in your Oklahoma home, let’s connect so you can start planning your next move.
Home Equity: A Source of Strength for Homeowners Today
Experts agree there’s no chance of a large-scale foreclosure crisis like we saw back in 2008, and that’s good news for the Oklahoma housing market. As Mark Fleming, Chief Economist at First American, says: “. . . don’t expect a housing bust like the mid-2000s, as lending standards in this housing cycle have been much tighter and homeowners have historically high levels of home equity, so there likely won’t be a surge in foreclosures.” Data from the Mortgage Bankers Association (MBA) helps tell this story. It shows the overall percentage of homeowners at risk is decreasing significantly with time (see graph below): But even though the volume of homeowners at risk is very low, there is still a small percentage of homeowners who may be coming face to face with foreclosure as a possibility today. If you’re facing difficulties yourself, it can help to understand your options. It starts with knowing what foreclosure is. Investopedia defines it like this: “Typically, default is triggered when a borrower misses a specific number of monthly payments . . . Foreclosure is the legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property.” The good news is there are alternatives available to help you avoid going through the foreclosure process, including: Reinstatement Loan modification Deed-in-lieu of foreclosure Short sale But before you go down any of those paths, it’s worth seeing if you have enough equity in your Oklahoma home to sell it and protect your investment. You May Be Able To Use Your Equity To Sell Your House Equity is the difference between what you owe on the home and its market value based on factors like price appreciation. In today’s real estate market, many Oklahoma homeowners have far more equity in their homes than they realize due to the home price appreciation we’ve seen over the past few years. According to CoreLogic: “The total average equity per borrower has now reached almost $300,000, the highest in the data series.” So, what does that mean for you? If you’ve lived in your house for at least a few years or more, chances are your Oklahoma home’s value, and your equity, has risen dramatically. In addition, the mortgage payments you’ve made during that time chipped away at the balance of your loan. If your home’s current value is higher than what you still owe on your loan, you may be able to use that increase to your advantage. Rick Sharga, Executive VP of Market Intelligence at ATTOM Data, explains how equity can help: “Very few of the properties entering the foreclosure process have reverted to the lender at the end of the foreclosure. . . We believe that this may be an indication that borrowers are leveraging their equity and selling their homes rather than risking the loss of their equity in a foreclosure auction.” Lean on Experts To Explore Your Options To find out how much equity you have, work with a local real estate professional. They can give you an estimate of what your house could sell for based on recent sales of similar homes in your area. You may be able to sell your house to avoid foreclosure. If you find out you have to pursue other options, your agent can help with that too. They’ll be able to connect you with other professionals in the industry, like housing counselors, who can look into your unique situation and offer advice on next steps if selling isn’t your best alternative. Bottom Line If you’re an Oklahoma homeowner facing hardship, let’s connect so you have an expert on your side to explore your options and see if you can sell your house to avoid foreclosure.
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