According to the latest data from CoreLogic, as of the third quarter of 2020, the average homeowner gained $17,000 in equity over the past year, and that number continues to grow as home values appreciate.
The graph below is a great example of how home price appreciation can work in your favor. If you purchased a $300,000 home in January of this year, based on projected home price appreciation, you would potentially gain an expected $54,221 in equity over the next 5 years – just by being a homeowner.
So, if you’re thinking of moving, remember that as a homeowner, you may have more equity in your house than you realize. Using it to make a move to a new home while interest rates are still low may be the best decision you could make. Mark Fleming, Chief Economist at First American, notes:
“As homeowners gain equity in their homes, they are more likely to consider using that equity to purchase a larger or more attractive home – the wealth effect of rising equity. In today’s housing market, fast rising demand against the limited supply of homes for sale has resulted in continued house price appreciation.”