The stock market may have been bringing bad news recently, especially due to the fact that it comes with a lot of volatility. The good news is, despite the challenges in today's market, home prices have remained strong and are continuing to grow. Here's a quick explanation on how the housing market works:
Understanding Equity
The current value of your home minus the amount that you owe on the loan is called Equity. Since there is a huge variance in the demand for homes and the available supply, home prices have increased immensely. Although some markets have cooled down a bit, overall, home values have remained strong over the years.
In fact, according to CoreLogic's Homeowner Equity Insights, over the last 12 months, the average homeowner equity has gone up by $60,000.
Image source: CoreLogic and Keeping Current Matters
Valuable Pieces Of Information
Many people have been looking for reliable sources of income and investments, especially during the past few years, when many industries were hit badly. According to Chief Economist Lawrence Run of the National Association of Realtors or NAR,
“. . . the decline in the stock market has dented overall net wealth. It has fallen by $6 trillion from the first to the second quarter. Only housing wealth has held on, with homeowners’ real estate wealth (home value minus mortgage balance) rising by $1.2 trillion.”
Apart from increasing one's net worth, equity gives people the opportunity to do other things, such as moving to a place they like. This is because when you sell your current home, you can use the accumulated equity growth and pay for most fees to get started with your next home. Again, the growth of home prices may have been slower than the previous years, but it has always been continuous, just at a different pace.
Overall, if you are feeling stressed about today's stock market performance, take a look at the brighter side, such your home equity gains. If you are wondering how to sell your home with the least headaches or want to check how the local housing market is in your area, feel free to connect with Realtor® Kyle Kelly or any member of The Island Wide Team. As always, we would love to help you get the home of your dreams!
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