 If you're a homeowner, you likely just got a big boost in your overall net worth due to rising home equity. Equity is what your home is currently valued at, minus the amount that you still owe on your loan. Based on recent price appreciation, you’re likely building that equity far faster than you may have expected. Here's how that works: It's no surprise that home prices are on the rise, and this is because of the ongoing imbalance between the number of buyers in the market looking to make a purchase and the number of available homes for sale. Because of this heavy imbalance, however, your home is worth more in today’s market because it’s in high demand. Patrick Dodd, President and CEO of CoreLogic, explains: “Price growth is the key ingredient for the creation of home equity wealth. . . . This has led to the largest one-year gain in average home equity wealth for owners. . . .” Because your home value is likely to have climbed so much, your equity has most likely increased as well. In fact, the average homeowner’s equity has grown by about $64,000 over the last 12 months, according to the latest Homeowner Equity Insights from CoreLogic. That's considered the nationwide number. To see what’s happening in a specific area such as here in Idaho, check out the graphic below. Using the data from CoreLogic, the map breaks down the average year-over-year equity growth for each state. Idaho shows an average of about $52,000.  Rising Home Equity Provides Opportunity
Equity can help you achieve your financial goals in addition to just building your net worth. Buying your next home, for example! The equity you build up in your current home comes back to you in the sale of that house in the future. This means that, in a market where homeowners are quickly gaining so much equity, the amount you build may be just what you need to cover a large portion (or perhaps even all!) of the down payment on your next home. If you’ve been hesitant to sell, or if you’re worried about rising costs should you decide to buy a new home, know that the equity you've built thus far in your current home can help fuel your move. Bottom Line If you’re planning to move, the equity you’ve gained can make a big impact on what you're able to afford. To find out just how much equity you have in your current home and how you can use it for your next Idaho home purchase, connect with Carolyn at Grafted Realty! |
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