Prices of homes over the next five years, are expected to appreciate, on average, by 3.6% per year and to grow by 18.2% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.
So, what does this mean for homeowners and their equity position?
The definition of equity is the difference between the market value of your home and the amount you owe to the lender on the mortgage. As an example, let’s assume a young couple purchased and closed on a $250,000 home this January. If we only look at the projected increase in the price of that home, how much equity will they earn over the next 5 years?
Since the experts predict that home prices will increase by 5.0% in 2018, the young homeowners will have gained $12,500 in equity in just one year.
Over a five-year period, their equity will increase by over $48,000! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.
Not only is homeownership something to be proud of, but it also offers you and your family the ability to build equity you can borrow against in the future. If you are in the real estate market to buy a home, are a distressed home owner looking options, want to know what your home is worth, want to sell real estate, or simply want to do a cash out refi (refinance), contact your Century 21 Allstars 100 Real Estate Agent, Steven Batista, today! I can offer selling tips, provide you with a Comparative Market Analysis (CMA) and more!
Source: Keeping Matters Current