The Homeowner Equity Increases an Astonishing $1 Trillion

Dated: December 17 2020

Views: 46

Homeowner Equity Increases an Astonishing $1 Trillion

Homeowner Equity Increases an Astonishing $1 Trillion | MyKCM

In a year that was financially devastating for many Americans, some good news for most homeowners is the dramatic gain in home equity over the last twelve months. Last week, CoreLogic released its 2020 3rd Quarter Homeowner Equity Insights report, which reveals four major findings:

  1. U.S. homeowners with mortgages have seen their equity increase by a total of $1 trillion since the third quarter of 2019.
  2. The average homeowner gained approximately $17,000 in equity over the past year.
  3. This is a 10.8% increase in equity over last year.
  4. 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 with substantial equity are in a much better position to work out a deal with their lender if they cannot pay their mortgage. Alternatively, they also 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."

Here’s a map showing equity gains by state:Homeowner Equity Increases an Astonishing $1 Trillion | MyKCMThis 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 SummitAt 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.

Bottom Line

In a year that has many of us reevaluating what “home” really means, those who own their homes have been rewarded with a financial windfall that averages $17,000 individually and totals $1 trillion nationally.

Blog author image

Nanci Gilbert, PA

Nanci strives to provide every client with a smooth and worry-free experience when it comes to buying and selling real estate. In an industry that can move very quickly, she prides herself on taking t....

Latest Blog Posts

With Mortgage Rates Climbing, Now’s the Time To Act.

With Mortgage Rates Climbing, Now’s the Time To ActLast week, the average 30-year fixed mortgage rate from Freddie Mac jumped from 3.22% to 3.45%. That’s the;

Read More

Sellers: Don’t Wait Until Spring To Make Your Move.

Sellers: Don’t Wait Until Spring To Make Your MoveAs you plan out your goals for the year, moving up to your dream home may top the list. But, how do you know when to make your move? You

Read More

Achieving the Dream of Homeownership!

Achieving the Dream of HomeownershipHomeownership has long been considered the American Dream, and it’s one every American should feel confident and powerful pursuing. But owning a home is

Read More

When Is the Right Time To Sell??

When Is the Right Time To Sell Some HighlightsIf you’re trying to decide when to list your house, the time is now. There are plenty of buyers eagerly waiting for your home

Read More