CoreLogic recently released their 2015 2nd Quarter Equity Report which revealed that 759,000 properties had regained equity in the last quarter. That means that 91% of all mortgaged properties (approximately 45.9 million) are now in a positive equity position. Anand Nallathambi, president and CEO of CoreLogic, reported: “For much of the country, the negative equity epidemic is lifting. The biggest reason for this improvement has been the relentless rise in home prices over the past three years which reflects increasing money flows into housing and a lack of housing stock in many markets.
Obviously, this is great news for the financial situation of many homeowners.
Last month in Colorado homes appreciated an average of 1.4%. So, that will give you just a small snapshot into the equity that you may have been collecting during your homeownership.
But, do you as a homeowner realize how your equity position has changed? Or how you can use this home equity.
A recent study by Fannie Mae suggests that many homeowners are unaware that their equity position has changed…in some cases dramatically. For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, only 9% of homes are in that position. The study also revealed that, though 69% of homes had “significant equity” (greater than 20%), only 37% of Americans realize it.
With a sizeable 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.”
Every homeowner should be aware of the true equity in their house and also realize the opportunities that go along with it. If you are unsure of the home equity you currently have built up in your home, contact me for your annual equity review. You may be surprised!