If you’re a current homeowner, you should know your net worth just increased from your rising home equity. Equity is the current value of your home minus what you owe on the loan. Today, you’re building that equity far faster than you may expect – and this gain is great news for you.

There are several ways to build your home’s equity. These include an increase in your home’s value in an appreciating real estate market, paying down your mortgage loan balance, and doing a home remodel. Here’s how it happened last year. Home values are on the rise due to low housing supply and high buyer demand. Basically, there aren’t enough homes available to meet this high buyer interest,  so bidding wars are driving home prices up. When you own a home, the rising prices mean your home is worth more in today’s market. And as home values rise, your equity does too. As Dr. Frank Nothaft, Chief Economist at CoreLogic, explains:

“Home prices rose 18% during 2021 in the CoreLogic Home Price Index, the largest annual gain recorded in its 45-year history, generating a big increase in home equity wealth.”

The latest Homeowner Equity Insights from CoreLogic shed light on just how much rising home values have boosted homeowner equity. According to that report, the average homeowner’s equity has grown by $55,300 over the last 12 months. In California, the average increase is $117,000, the highest anywhere in the nation.

Want to know what’s happening in your area? Text : Home Equity to (310) 519-7670, to see how your equity has increased. For each state, here’s a breakdown of the average year-over-year equity growth.

How Rising Equity Impacts You

In addition to building your overall net worth, equity can also help you achieve other goals like buying your next home. It works like this: when you sell your house, the equity you built up comes back to you in the sale. And if you’ve been following me, you know that we know of a program that, under certain conditions, allows you to buy first and sell later AND possibly transfer your property value.

In a market where you’re gaining so much equity, it may be just what you need to cover a large portion – if not all – of the down payment on your next home. So, if you’ve been holding off on selling and worried about being priced out of your next home because of today’s home price appreciation, your equity may help fuel your move. I also know of a program that allows you to purchase your home for about 50% of the sale price and then you just make tax, insurance and HOA payments. No more payments for principal and interest during your life. (Certain conditions apply). As an example, one of my clients is now paying less than $1,000 per month for their newly purchased home (they only pay tax and insurance).

Equity can be a real game-changer if you’re planning to make a move. To find out just how much equity you have in your home and how you can use it to fuel your next purchase, remember to text Home Equity to (310) 519-7670. As always, please call or text me with any questions.