The Amazing Comeback of Home Equity

Real Estate Broker/Owner with Everest Peak, Inc.

Many homeowners will remember the pain caused by The Great Recession years, not least the dramatic effect it often had on the home equity they had built-up.

How great, then, to be able to report that home equity has been making a stunning comeback over the past few years of recovery.

According to a recent national study by Corelogic, home equity more than doubled between June 2011 and June of this year.

Measuring home values against mortgage debt, total home equity across the nation stood at $6.1 trillion in June of 2011. By the same month this year, it had risen to $12.7 trillion.

What a fantastic turnaround in five years! Indeed the current level of home equity is not too far at all off the peaks we saw pre-recession, although we should take into account that mortgage debt has grown compared with the lead up to that period, though it has plateaued recently, no doubt due in part to the continuance of low home loan interest rates.

It would be difficult to underestimate the significance of these results, in terms of the health of the current homes market. More equity equals better confidence and makes it far more likely that those homeowners who can make a discretionary decision to move home will actually do so.

And because that equity can be used in a myriad of ways, it promotes sales both up and down the housing chain, as some people will take the decision to downsize and pocket some or all of their equity.

Moving closer to home, the same Corelogic report also demonstrates that average equity gain per homeowner in New Mexico was $4000 between June 2015 and June 2016.

These important statistics once more emphasize the fabulous opportunities in real estate. If you're looking to buy, current trends suggest that in many cases you'll be adding equity to the home almost as soon as you move in. For sellers, it's clear that growing equity levels provide so many options, in terms of bringing that money into play in their lives.

Comments (1)

Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTORĀ® - Oklahoma Investment Properties

We were fortunate in Oklahoma City not to have a meltdown, just a "normal" recession, and elsewhere you had as much as 80% reductions in value even below the cost of building. It was bound to recover.

Oct 28, 2016 07:04 AM