Do You Know How Much Equity You Have in Your Home?
- By simplify
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- 20 Jun, 2017
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Price Appreciation = Good News for Homeowners
“ One million borrowers achieved positive equity over the last year , which means risk continues to steadily decline as a result of increasing home prices.”
“ Homeowner equity increased by $766 billion over the last year, the largest increase since Q2 2014 . The rising cushion of home equity is one of the main drivers of improved mortgage performance. Since home equity is the largest source of homeowner wealth, the increase in home equity also supports consumer balance sheets, spending and the broader economy.”
This is great news for homeowners! But, do they realize that their equity position has changed?
“ This is only the second time in the survey’s history that the net share of those saying it’s a good time to sell surpassed the net share of those saying it’s a good time to buy. ”
78.8% of homeowners have significant equity (more than 20%) in their homes today!
“High home prices have led many consumers to give us the first clear indication we’ve seen in the National Housing Survey’s seven-year history that they think it’s now a seller’s market. However, we continue to see a lack of housing supply as many potential sellers are unwilling or unable to put their homes on the market …”
Bottom Line
There is no doubt that the largest challenge in today’s housing market is a lack of housing inventory for sale. This challenge has been defined as an “overwhelming lack of supply,” and even a “straight up inventory crisis.”
First American just released the results of a survey which sheds light on the reasons for the current lack of supply.
The survey asked title agents and real estate professionals to identify what they believe are the top reasons for this lack of inventory in their markets. Here are the results of the survey:
- 47% - existing homeowners are worried that they will not be able to find a home to buy
- 5% - first-time buyer demand is absorbing a large share of available homes
- 3% - existing homeowners’ mortgage rates are lower than the current rates
- 6% - insufficient or negative equity in the home
- 6% - foreign buyer demand is absorbing a large share of available homes
As the survey revealed, there is a shortage of current homeowners willing to put their homes on the market for one of three reasons (see numbers 1, 3 and 4 above).
Is this an opportunity for some homeowners?
The report on the survey explains:
“The crowd has spoken, and it seems in many markets home buyers and sellers alike are ‘imprisoned’ by the lack of housing inventory."
That leaves a tremendous opportunity for every homeowner not facing these concerns. If you can put your home on the market today, you are subject to far less competition than at any time in recent history. That will result in your home selling quickly and for the highest possible price.
Bottom Line
While many homeowners are feeling imprisoned for multiple reasons, those who are not handcuffed by these concerns have a once in a lifetime opportunity to sell their houses at a peak selling time.
