Average Homeowner Earned More Than $ 55,000 In Equity 2021: CoreLogic Report

Homeowners earned more than $ 55,000 on average in equity stocks in 2021, a new CoreLogic report has revealed. (iStock)

Homeowners earned an average of $ 55,300 per borrower in 2021, a collective profit of more than $ 3.2 trillion in equity earnings for the year, according to CoreLogic fourth quarter Homeowners Equity Report.

Equity increased for homeowners on home loans – about 63% of all homeowners – by 29.3% year-on-year in the fourth quarter of 2021, the report showed. This is because house prices have risen at a record rate throughout the year. In particular, Hawaii, California and Washington recorded the highest average earnings per share, the report said. In contrast, North Dakota and Washington, DC showed the lowest levels.

“Housing prices rose 18% in 2021 on the CoreLogic Housing Price Index, the largest annual gain in its 45-year history, creating a huge increase in housing stock wealth,” said Frank Nothaft, chief economist at CoreLogic. “For low- and middle-income homeowners, equity has historically been an important source of wealth.”

If you want to take advantage of your increased equity, consider making a cash-out refinancing. Visit Credible to find the personalized interest rate without affecting your credit score.


Rising prices mean less risk for homeowners

Homeowners face fewer risks in the housing market as prices rise. This is because negative equity, to which a homeowner owes more than it’s worth, fell 3% to 1.1 million homes, according to the CoreLogic report. This decrease was helped by the appreciation of the house price observed in the 4th quarter of 2021 and represented a 12-year low.

By comparison, 1.5 million homes were in negative equity in the fourth quarter of 2020, almost a quarter (24.9%) more than in 2021. Borrowers can move away from negative equity when they repay more than home or when the value of their home increases.

Negative equity can also be known as “underwater” mortgage or “upside down”. Although the majority of lenders will not refinance a home with negative equity, consumers could consider refinancing their mortgage to get back on track.

Homeowners can use a Mortgage refinancing calculator to see if this is right for their financial situation and they can also visit Credible to Compare Multiple Mortgage Lenders Simultaneously.


How Homeowners Can Access Cash In Their Home

Homeowners can take advantage of the appreciation of home equity and have several options at their disposal to capitalize on their growing share. This can be used to pay off high interest rate credit card debt, finance home improvement projects and more.

One way to capitalize on your home is to sell it. In the midst of the current competitive housing market, sellers could leave with a profit they could possibly pay in advance for a new home, with some money left over. Mortgage giant Fannie Mae’s Economic and Strategic Research Group predicts a 7.6% jump in the average house price this year amid rising inflation. He added that buyers could face the challenges of affordability, along with high demand and stock shortages.

Another option for homeowners who do not want to move or buy a new home amid higher levels of competition is refinancing. Homeowners who make cash refinancing can make money from their home and maybe even reduce their monthly payment with a new, lower interest rate. At present, interest rates are on average just under 4% per annum (APR), according to data by Freddie Mac.

Homeowners can also take out a Housing Equity Credit Line (HELOC). This works as a second mortgage on a home and opens a new loan against the appraised value of your home. Mortgage equity loans are separate from your current loan and can be given in different loan amounts based on the value of a home.

If you want to see the best way to use your own funds for home improvement or to see how much equity you could have, Contact Credible to speak with a mortgage specialist and get answers to all your questions.

Do you have a question about finances, but do not know who to ask? Email the trusted money specialist at [email protected] and your question can be answered by Credible in the Money Expert column.

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