Equity-rich homeowners sprouting across the country
Thanks to the thriving real estate market, housing appreciation has soared for many homeowners. In fact, according to real estate research firm ATTOM Data Solutions, $17.8 million, or 30 percent, of U.S. homes with a mortgage are now considered “equity-rich.”
To be considered equity-rich, the combined estimated amount of loans secured by the property should be 50 percent or less of the estimated market value. In other words, it means the homeowners have accrued at least half of the equity in their homes.
The rise in values has also helped reduce the number of seriously underwater properties across the country – down 1 percent. The report revealed that that one in 18 mortgaged homes, or 3.2 million, are considered “seriously underwater. Seriously underwater is when the combined balance of home loans secured by the property total at least 25 percent more than the property’s estimated market value.
Although the pandemic has caused other sectors of the economy to suffer, the housing market has remained formidable with median home prices continuing to climb and super-low interest rates encouraging more people to purchase homes.
Building equity is one of the primary financial benefits of homeownership. Unlike almost every other asset purchased with a loan, such as vehicles, which lose value while you pay them off, mortgage payments reduce what you owe while your home also gains value. Consequently, home equity can be a long-term strategy towards building wealth.
The median net worth of homeowners is 80 times larger than renters, according to data from the US Census Bureau. The data also shows that the biggest contributors to wealth are home equity and retirement accounts.
While wealth is subjective, having a certain amount of money, a well-funded retirement, or being debt-free, real estate is a certainly a stepping stone to building wealth and achieving other financial goals. Whereas no method investing is fool-proof, real estate is historically a better and steadier method of gaining a profit than other forms of investment.
Homeownership is definitely not without its challenges and expenses, however. Renter’s don’t pay for things like Homeowners Association (HOA) fees, maintenance and upkeep, saving for a down payment, homeowners insurance, and property taxes. But with solid financial plan, homeownership can actually be more fiscally responsible than renting.
If homeownership is on your mind, The Platinum Group Realtors are the local experts that can help you determine if it’s right for you.
With the experience and skills necessary to guide you, the team at Platinum Group approaches each individual client proficiently to ensure that all decisions made are in your best interest. During demanding times like these, a trusted real estate professional can help ensure your experience is as successful as possible. The Platinum Group, Realtors have worked for years at growing and refining their skills, and are ready to share their expertise, knowledge on market conditions, and accomplished negotiation techniques.
For a no-obligation consultation, call today: (719) 536-4478 or visit PlatinumHomesSales.com.