Home Equity Expands to a Shocking $1 Trillion!

2020 was a year that was financially devastating for many people, although there is some good news. Homeowners have seen a dramatic gain in home equity over the last twelve months. 

During the middle of December, CoreLogic released its 2020 3rd Quarter Homeowner Equity Insights report, which shows four major points:

1. U.S homeowners with mortgages have seen their equity increase by a total of $1 trillion since the third quarter of 2019.
   

2. The average homeowner gained approximately $17,000 in equity over the past year.

3. This is a 10.8% increase in equity over the last year.

4. The average household with a mortgage now has $194,000 in home equity.

Given these statistics, many homeowners can afford to redesign their homes to correspond with their needs. Frank Martell, President and CEO of CoreLogic, explains in the report:

“The housing market has remained a strong pillar in an otherwise tumultuous economic year. A sharp rise in demand, spurred by record-low interest rates, continues to bolster homeowner equity. And with many people now spending more time than ever before at home, some homeowners have tapped into their strengthening equity to fund renovations.”

The build-up in equity also provides more security to the homeowners that have been financially impacted in a negative way by the pandemic. Today, homeowners that have substantial equity may be in a position to make payment arrangements with their servicer, if they cannot pay their mortgage. These homeowners also have the power to sell and walk away with their built-up equity. Frank Nothaft, Chief Economist for CoreLogic, addresses this benefit in the report:

“Over the past year, strong home price growth has created a record level of home equity for homeowners…This provides an important buffer to protect families if they experience financial difficulties and is one reason for the generational-low in foreclosure rates reported.”

Below is a map showing average equity gains by state:

Bottom Line

In a year that has many of us reevaluating what we need in a home, those who own homes have been rewarded with financial windfalls that average $17,000 individually and totals $1 trillion nationally. This gain in home equity has been a blessing for homeowners during these trying times, and there is no sign of it slowing down. If you are looking to buy your first home or refinance your current home, we have some great options available to you!