Building financial wealth and stability remains one of the top reasons
Americans choose to own a home, and as a homeowner, your wealth often
grows without you even realizing it. In a recent paper published by the Urban Institute, Home Ownership is Affordable Housing,
author Mike Loftin illustrates how homeowners increase their equity and
their wealth simply by making monthly mortgage payments: “The principal portion that reduces the loan balance
builds the homeowner’s equity. In doing so, the principal payments
behave like an automatic savings account. The principal payment is not
money going out; it is money staying in.” But home equity – the difference between the value of your home and
what you currently owe – isn’t just built through your monthly principal
payments. Home price appreciation plays a vital role in growing your
equity and, ultimately, your wealth. As Freddie Mac explains: “Homeownership has cemented its role as part of the
American Dream, providing families with a place that is their own and an
avenue for building wealth over time. This ‘wealth’ is built, in large
part, through the creation of equity…Building equity through
your monthly principal payments and appreciation is a critical part of
homeownership that can help you create financial stability.” CoreLogic recently published their latest Homeowner Equity Insights Report,
and it shows continued growth in equity amidst record home price
appreciation. The report provides several key takeaways, all of which
point to rising wealth for homeowners: Here, you can see the equity gains by state: In addition to being a critical tool in building wealth, a
homeowner’s equity also provides significant flexibility. When you sell
your house, the accumulated equity comes back to you in the sale. Recent
increases in home equity coupled with record-low mortgage rates mean it
could be the perfect time for homeowners looking to make a move. Mark Fleming, Chief Economist at First American, notes: “Existing homeowners today are sitting on record amounts of equity.
As homeowners gain equity in their homes, the temptation grows to list
their current home for sale and use the equity to purchase a larger or
more attractive home.” Increasing equity also helps families facing challenges brought on by the pandemic. Frank Martell, President and CEO of CoreLogic, explains in the recent Homeowner Equity Insights Report: “Homeowner equity has more than doubled over
the past decade and become a crucial buffer for many weathering the
challenges of the pandemic. These gains have become an
important financial tool and boosted consumer confidence in the U.S.
housing market, especially for older homeowners and baby boomers who’ve
experienced years of price appreciation.” Home equity has always been a powerful wealth-building tool, and
homeowners continue to see their financial stability increase. Let’s
connect today so you can better understand how much equity you have in
your current home or if you’re ready to take the next step in building
your savings as a homeowner.Homeowner Wealth Increases Through Growing Equity This Year
Homeowners Continue To See Equity Increase
Equity Provides Homeowners with Flexibility
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