If you own a home, it’s likely that your net worth has increased significantly over the past year. With home prices rising, your equity has likely grown faster than expected. So, how much has homeowners’ wealth increased through real estate in the past year? Let’s take a look.
Equity is the difference between your home’s current value and the remaining loan balance.
Over the past year, the number of buyers searching for homes has outpaced the available supply, leading to rising prices. This price growth directly translates into increased equity for homeowners.
How much equity have homeowners gained in the last 12 months?
According to CoreLogic’s latest Homeowner Equity Insights, the average homeowner’s equity increased by $28,000 in the past year alone.
This is a national average, and you can see the equity gains for each state in the chart below. For Illinois, where I’m located, the average increase was $27,000.
What if you bought your home before the pandemic?
If you purchased your home before the pandemic, the equity growth is even more significant. Realtor.com data shows that home prices rose by 37.5% between May 2019 and May 2024, meaning the value of your home has likely increased considerably. In other words, you could have gained additional equity equivalent to 37.5% of what you originally paid.
How can rising home equity benefit you?
With home prices skyrocketing in recent years and still climbing, homeowners have accumulated substantial equity. This equity can offer significant benefits.
You can use this equity to start a business, fund education, or help finance your next home. When you sell, the accumulated equity can cover a large part—or even all—of the down payment on your next property.
Conclusion:
Whether for living or investment, real estate tends to appreciate in value long-term, especially if the location is good. Keep this in mind. When deciding the right time to buy, focus on your personal needs rather than the current market conditions.
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