Home Equity Rises for 10th Straight Quarter
Good news on the home front! Home equity continued to grow last quarter. Much of the news has been focused lately on higher interest rates, a decline in the number of houses sold, and house prices dropping. The topic that isn’t getting as much attention is the fact that homeowners across the U.S. continue to see the amount of equity in their home increase.
First, let’s take a look at what equity is. Equity is the amount of money in your home once you subtract what you owe on it. For example, let’s say you purchased your home in 2020 and you currently have a loan balance of $275,000. Your current home value is $325,000. That means you have $50,000 in equity. As home values fluctuate and as you continue to make your monthly payments, the amount of equity in your home changes as well.
ATTOM recently released their third quarter Home Equity & Underwater Report. The report looks at the amount owed on properties and compares that data with estimated market values. In their third quarter report, they found 48.5 percent of properties in the U.S. were “equity rich,” meaning the equity in the homes was more than the amount owed on the property.
That’s great news for a few reasons. First, it means that despite the doom and gloom headlines, home values are holding steady. Secondly, it means we aren’t likely to see a wave of foreclosures for a few different reasons, most notably homeowners currently facing foreclosure likely have enough equity in their home that they could sell it and pay off the loan balance without having to go through the full foreclosure process.
Curious as to what your home may be worth? Feel free to reach out and let’s talk!