Did You Know Your House Likely Made $55K In Equity Over The Past Year!
During the past year, you might’ve faced a few financial ups and down’s due to the fluctuations in the economy. While people might be complaining about rising gas prices, there is one thing that you can celebrate. The past year also brought skyrocketing home values, which means that your net worth has likely increased if you own a house. In fact, home prices rose by about 18% last year, which brings the average homeowner an increase of around $55,300 in equity. Knowing how much your home equity rose and what to do with your newfound extra funds gives you an edge on capitalizing on this prosperous time.
How Do You Calculate Equity?
Calculating equity is fairly simple. All you need to do is subtract what you still owe on your loan from the current value of your home. Since home values went up, you might need to do a little research to find out your home’s market price. One way you can do this is to look up similar homes in your area, or you can reach out to a real estate agent in Long Beach who can find out for you. This is especially beneficial if you’ve made some upgrades to your home that might increase your home’s value substantially more than the typical house like yours that’s on the market.
Why Are Home Values Rising?
Increasing home values are occurring because there’s a shortage of houses on the market. With more buyers being forced to compete to secure a home during the shortage, bidding wars are happening. Every time a buyer makes a higher bid, the value of the home goes up. While builders are working as fast as they can to put more homes on the market, this trend is expected to continue for a while longer. You’ll also find that home values are increasing at faster rates in high-demand areas where people are moving to find greater opportunities for employment or to improve their lifestyles.
Does This Mean It’s Time to Sell?
If you’ve been waiting to move for financial reasons, then you’ve likely just received the boost you need to go forward with finding a new house. The increased equity that you’ve just received can be exactly what you need to make a down payment or to feel comfortable with taking on a new mortgage. Having more money to put towards the down payment not only helps you to feel more financially stable but could also give you leverage over buyers who don’t currently have a home. Being able to demonstrate financial security to sellers gives you the competitive edge you need to secure a home in a tight market.
As you explore how much your net worth went up, keep in mind that different states had even higher equity hikes. In California, the average homeowner’s equity gain was around $117,000, which fits quite nicely into your financial portfolio. Choosing to make a move now while the market is still hot helps you take advantage of the increased equity to make buying your dream another smart investment.