Weekly Market Preview is provided by West Coast Mortgage Group, a registered member of RateMastery.
It pays to be a homeowner in much of the U.S. right now
If you’re a homeowner and live in certain parts of the country, your net worth just got larger. Why? Because right now it pays to own a home.
“Nationally, the average homeowner with a mortgage saw their equity shoot up by nearly $16,200 in the past year alone, according to a recent report by CoreLogic,” reports Claire Trapasso, senior news editor of realtor.com and an adjunct journalism professor at St. John’s University.
Comparing the second quarter of this year to the second quarter of the previous year, that’s a 12.3% annual increase of home prices across the country.
Trapasso goes on to quote CoreLogic’s chief economist Frank Nothaft: ”It’s good news if you’re an existing homeowner. … You can certainly use that additional wealth as collateral you could borrow against if you’re looking to make some home improvements.”
Left coasters accrued even more equity, with Californians gaining an average of $48,800 in just one year. If you think about it, that’s more than many folks earn in a year and all these homeowners had to do was make their mortgage payments and pay their taxes.
The Realtor.com article goes on to quote a San Francisco Bay Area market analyst as saying, ”The first half of 2018 was probably the most ferocious market since the year 2000 in terms of buyer demand, competition between buyers, and overbidding. In the Bay Area, we saw some huge jumps in median sale prices. It’s crazy.”
These huge equity gains could slow down or reverse themselves, however, with inventories expected to rise soon. If buyers have more to choose from, prices are less likely to be driven up by bidding wars. There is, after all a limit on what people can afford to pay for a home.
According to the article, California’s gains were followed by Washington, where average home equity was up $41,100; Nevada, at $32,193; Hawaii, at $29,565; and Massachusetts, at $23,527.
States experiencing a loss in equity include Louisiana, Connecticut, and North Dakota, but in less than $1K amounts.
This Week’s Mortgage Rate Summary and Forecast
This Week’s Potential Volatility: High
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