U.S. homeowners keep building equity
Owning a home is paying off financially for a growing number of homeowners, according to the latest research from CoreLogic.
According to the company’s latest Home Equity report, the average homeowner gained $4,900 in home equity during the last year. And in the second quarter of 2019, 151,000 residential properties across the United States regained equity.
Equity, of course, is one of the biggest benefits of owning a home. Simply put, equity is the difference between what you owe on your mortgage and how much your home is currently worth. If you owe $100,000 on your mortgage and your home is worth $200,000, you have $100,000 in equity.
You can access this equity in the form of home equity loans and home equity lines of credit. With the money from these products, you can pay off high-interest-rate credit card debt, pay for a major home renovation, cover the costs of a child’s college education or whatever else you’d like.
You’d then pay back the money you borrowed against your home’s equity in monthly payments, at far lower interest rates then you’d get with a credit card or personal loan.
Gaining equity, of course, is not guaranteed. But the percentage of homes that have lost equity continues to fall. CoreLogic reported that from the first quarter of this year to the second, the total number of mortgaged properties in negative equity fell by 7 percent to 2 million homes across the country. That’s equal to 3.8 percent of all mortgaged properties.
Again, there’s no guarantee that your home’s value, and the equity you build, will grow after you buy it. It is possible for homes to fall in value. The odds, though, are high that if you hold onto your home for a long enough period of time – often five to seven years – that it will increase in value.