Here’s my explanation of today’s high appreciation and where it’s headed.
Today I want to talk about a topic that should be important to buyers and sellers: appreciation. Over the last year, we’ve seen equity grow by 33%, so let’s look where equity is heading in the future.
Because of the increase, the average American homeowner has over $200,000 worth of equity in their home. This is good news because it reduces the risk of mass foreclosures flooding the market. If someone can’t make their payments, they can always leverage the equity in their home.
But this is just the extension of a longer trend. Equity has doubled in the last 10 years, leading the president and CEO of CoreLogic Frank Martell to say, “These gains have become an important financial tool and boosted consumer confidence in the U.S. housing market.”
If you look at the chart at 2:00 in my video, you can see that equity is predicted to grow by 8.66% in 2021. Afterward, growth will begin to return to the historical norm, but this is still a great time. If you buy a home in 2021 worth $350,000, by 2026 it will be worth $443,629. That’s almost $100,000 in equity growth.
Considering this, doesn’t it make sense to grow your equity? I strongly recommend buying a home so you can take advantage of increasing equity. If you want to talk to me about this or any other topic, please reach out to me. I am always willing to help.