Home Equity jumped 13%… Americans homeowners are getting richer
Goose and Gander
Home equity jumped 13.3 percent in the first quarter of this year compared from a year earlier, according to CoreLogic. For the average borrower, that translates to $16,300 in additional home equity gained during the year, a collective $1.01 trillion. That is the biggest gain in four years. This includes San Diego homes and condos in Pacific Beach. The question comes up, Should I buy a Home….
Despite the struggles of skyrocketing home prices amid an atmosphere of extenuating inventory circumstances, Americans are getting richer, and home equity is in part, to be thanked. Overall, according to a recent report from the Wall Street Journal, “Americans’ wealth surpassed the $100 trillion mark for the first time in early 2018, as rising home prices offset the hit to households’ assets from a stock-market swoon in the first quarter.” Oddly enough, the hot seat of high home prices keeping some buyers glued to the chair is turning into a king’s throne of wealth for sellers in some regions of the nation as their equity builds alongside value. On this, according to Frank Nothaft, chief economist at CoreLogic, “Home-price growth has accelerated in recent months, helping to build home-equity wealth and lift underwater homeowners back into positive equity, the primary driver of home equity wealth creation.” This rings particularly clear in areas where prices and gains are the highest as, “Homeowners in Washington state, where prices are soaring, gained an average $44,000 in home equity, while Californians gained an average $51,000,” as recently reported by CNBC. While supply levels continue to thrash against demand and high home prices are making some richer while keep others stuck, buyers are left trying to find their footing on the climb out from under debt and into equity.
Seemingly, the market imbalance extends beyond inventory although undoubtedly, supply plays a major role in both the uptick in equity for some and persistent pressure for others. Blanket figures show that, “Household net worth – the value of all assets such as stocks and real estate minus liabilities like mortgage and credit-card debt – rose by 1% from the previous quarter, or more than a trillion dollars, to a record $100.768 trillion,” according to the Federal Reserve as cited by the Wall Street Journal. And in consideration of this negative equity in the form of mortgage debt, “2.5 million borrowers or 4.7 percent of all homeowners with a mortgage are still underwater on their home loans, meaning they owe more than the homes are currently worth,” although positive shifts are noteworthy as, “in the first quarter of this year, 84,000 borrowers came up from underwater, regaining equity,” CNBC reveals. Experts tend to agree that this movement is not going to stand still anytime soon, especially under the Western skies. To this point, experts like Nothaft claim, “In the far Western states, equity gains are fueled by a long run in home price escalation. With strong economic growth and higher purchase demand, we expect these trends to continue for the foreseeable future.” All things considered, as long as borrowers continue to come up from air, what’s good for the goose just might be good for the gander. Shared from JMJ Financials, Steve K.
#SanDiegoHomes, #equity, #homeequity, #shouldI buyAhome, #realestatemarket, #getrich, #exittheratrace, #buyingahome, #firsttimehomebuyer, #investments,