Homeowners are experiencing huge jumps in equity

About 63% of US homeowners are experiencing an equity increase of more than 10.8% year over year between the third quarter of 2019 and third quarter of 2020, according to CoreLogic’s Homeowner Equity Insights Report. That’s a lot!

Much of this is due to the historically low mortgage interest rates along with a shortage of homes for sale, which has lead to increased prices. In many cases, homes are selling for more than the listed price or sellers are receiving multiple offers, further driving up the price. With an increase in the value of homes, and more people working and learning from home, people are adding to their finished square footage or moving to larger (or different) spaces.

Now is a great time to look at the equity you have in your house. Equity is the difference between what you owe on your house and what it is worth now. This is money that can be accessed for renovations through a home equity lone/line of credit. You may plan to stay in your home for years to come so now is a good time to make improvements that you’ll enjoy. Just keep in mind over improving (adding too expensive items or enlarging the size) can lead to a poor “return on investment”. You’ll want to recoup the expense of renovations when you decide to move.

Your equity can be used to make a down payment on your next home if you decide to make a move. Paying 20% down will avoid PMI (private mortgage insurance) being part of your new monthly payment and that’s always to your advantage.

So how do you know what the value of your home is today? How can you determine how much equity you have in your home?

These are questions that you should ask your Realtor. Your Realtor is not an appraiser but can give you a solid estimate of your home’s present worth. Your Realtor is a trained professional happy to help you with your questions about equity.