One of the Top Reasons to Own a Home
One of the benefits of homeownership is that it is a “forced savings plan.” Here’s how it works: You make a mortgage payment each month. Part of that payment is applied to the principal balance of your mortgage. Each month you owe less on the home. The difference between the value of the home and what you owe is called equity.
If your home has appreciated since the time you purchased it, that increase in value also raises your equity. Over time, the equity in your home could be substantial. Recently, CoreLogic revealed that the average homeowner gained more than $65,000 in equity over the last 5 years.
Unlike last decade, homeowners are no longer foolishly tapping into that equity. In 2006-2008, many owners used their homes like an ATM by pulling equity out to purchase new cars, jet skis, or lavish vacations. They were pulling out cash (equity) from an appreciating asset, and then spending it on rapidly depreciating items. That is not happening anymore.
Over 50% of Homes Have at Least 50% Equity
The number of homeowners that currently have at least 50% equity in their home is astonishing. According to the Urban Institute, 37.1% of all homes in the country are mortgage-free. In a home equity study, ATTOM Data Solutions revealed that of the 62.9% of homes with a mortgage, 25.6% have at least 50% equity. That number has been increasing over the last five years:By doing a little math, we can see that 53.2% of all homes in this country have at least 50% equity right now. Of all homes, 37.1% are mortgage-free and an additional 16.1% with a mortgage have at least 50% equity.
Homeownership is different than renting. When you own, your housing expense (the mortgage payment) comes back to you in the form of equity in your home. That doesn’t happen with your rent payment. Your rent helps build your landlord’s equity instead.
Blog Archive2020-02-25 16:59:44
Entry-Level Homeowners Are in the Driver’s Seat!
The #1 Reason to List Your House Right Now!
How the Housing Market Benefits with Uncertainty in the World
How Trusted Professionals Make Homebuying Easier to Understand
Homeownership Rate on the Rise to a 6-Year High
How Pricing Your Home Right Makes a Big Difference
Great News for Renters Who Want to Buy a Home
Three Reasons Why Pre-Approval Is the First Step in the 2020 Homebuying Journey
Should I Sell My House This Year?
The New Spring Real Estate Market is Here. Are You Ready
Buying a Home Early Can Significantly Increase Future Wealth
3 Benefits to Buying Your Dream Home This Year
Top Renovations for Maximum ROI
The 2020 Real Estate Projections That May Surprise You
Expert Insights on the 2020 Housing Market
2020 Forecast Shows Continued Home Price Appreciation
5,300 Reasons to Be Happy You’re a Homeowner
The Biggest Issue Facing Housing Next Year
Get Your House Ready To Sell This Winter
Holiday Gifts Are Not the Only Hot Things Right Now
Have You Outgrown Your Home?
A 365 Day Difference in Homeownership
Millennials Are on the Move as First-Time Homebuyers
5 Reasons to Sell This Winter
Tips to Sell Your Home Faster
Click here to see ALL articles.