Home Equity: You May Have More Than You Think

by Hilton Head Real Estate Partners March 08, 2016 0 comments
Beaufort County, Home Sales

CoreLogic’s latest Equity Report revealed that 256,000 mortgaged households recently regained equity. This is great news for the country, as 92% of all mortgaged properties are now in a positive equity situation.

Price Appreciation = Good News For Homeowners
Frank Nothaft, CoreLogic’s Chief Economist, explains: “Home price growth continued to lift borrower equity positions and increase the number of borrowers with sufficient equity to participate in the mortgage market. In the last three years, borrowers with at least 20 percent equity have increased by 11 million, a substantial uptick that is driving rapid growth in home equity originations.”

Anand Nallathambi, President & CEO of CoreLogic, believes this is a great sign for the market in 2016 as well, as he had this to say: “Homeowner equity is the largest source of wealth for many Americans. The rise in home prices, expected to be at least 5% in 2016, will continue to build wealth and confidence across America. As this process continues,
it will provide support for the housing market and the broader economy throughout [the] year.”

But do they realize their equity position has changed?
A study by Fannie Mae suggests that many homeowners are not aware that they have regained equity in their home as their investment has increased in value. For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, CoreLogic’s report shows that only 8% of homes are in that position (down from 9% in Q2).

The study also revealed that only 37% of Americans believe that they have “significant equity” (greater than 20%), when in actuality, 74% do!

Home Equity

This means that 37% of Americans with a mortgage fail to realize the opportune situation they are in. With a sizable equity position, many homeowners could easily move into a housing situation that better meets their current needs (moving to a larger home or downsizing). Fannie Mae spoke out on this issue in their report: “Homeowners who underestimate their homes’ values not only underestimate their home equity, they also likely underestimate: 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes.”

Bottom Line
If you are one of the many Americans who are unsure of how much equity you have built in your home, don’t let that be the reason you fail to move on to your dream home in 2016!

If you are interested in where the Bluffton / Hilton Head Island real estate market is going? Give Jo Anne or Tony Rizza (843-301-5825) a call to better understand the current market, see the latest available properties, or to list your own home!

With over 25 years of experience, our team is ready to help!

Hilton Head Real Estate Partners
Partnering with you every step of the way.
 

 

 

 

by Hilton Head Real Estate Partners March 08, 2016 0 comments
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