Home equity is a hot topic lately, especially since home prices have escalated recently. In the second quarter of 2022, the average level of equity for homeowners with mortgages reached almost $300,000. Over the past five years, home equity has been skyrocketing, spurred into overdrive by the pandemic.
According to the National Association of Realtors, in March 2020, the median price of an existing home in the United States was $280,000, and by October 2022, it jumped to $379,000.
Three ways to increase your home equity:
- Making consistent monthly mortgage payments
- Completing home renovations
- Increasing neighborhood or city value
Just as equity can rise, it can lower as well; this is called “negative equity.” This happens when the homeowner owes more on their mortgage than the home is worth. Negative equity is not an issue for most people, thanks to the spike in home values, but that doesn’t mean it won’t be a factor when the housing market cools down.
Some home equity statistics:
- HELOC and home equity loans jumped by 47 percent between January and May of 2022.
- Hawaii had the highest home equity spike in 2022, at an average of $130,000.
- In the third quarter of 2022, home equity dropped by $1.3 trillion.
- Since March 2020, the average homeowner with a mortgage has gained $92,000.
- The home values throughout the US’s 50 biggest metro areas have increased between 19 and 66 percent.
- Defaulted mortgages accounted for less than 500,000 homes as of September 2022.
Home equity is an attractive benefit of homeownership. Making monthly mortgage payments are a better alternative than paying a landlord rent every month, as a mortgage allows you to build wealth.
Are you interested in building wealth through a home mortgage? You’ve come to the right place; contact EB Mortgage today to learn how we can help you tomorrow.
EB Mortgage is a locally owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us or e-mail us today!
Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com/