Homeowners gained a total of $2.9 trillion in equity in the second quarter of 2021 as home prices continued to grow, according to a new report.
Negative equity share, where a homeowner owes more on their home than what it is worth, fell to 2.3% in the second quarter, and 163,000 homeowners regained equity, CoreLogic's Homeowner Equity Report showed.
Homeowners with mortgages, which is about 63% of all properties in the U.S., saw a 29.3% annual increase in equity. This averages out to an annual gain of $51,500 per borrower.
If you want to take advantage of an increase in your home value, consider taking out a cash-out refinance. At today’s record low interest rates, you can take money out of your home and possibly still lower your monthly mortgage payment. Visit Credible to get started and find your personalized interest rate.
Consumer confidence in Q2 rises to highest level since pandemic began
As home prices grow, so does Americans' confidence in the housing market, U.S. News & World Report previously said. By the end of the second quarter, consumer confidence had risen to the highest point since the beginning of the pandemic.
Additionally, in a recent Corelogic consumer survey, 59% of mortgage holders said they are extremely confident in their ability to keep up with their monthly payments in the year ahead.
CoreLogic explained that homeowners have been able to remain current on their monthly payments due to government provisions, increased vaccine availability that has allowed people to return to work and record homeowner equity gains.
"The growth in homeowner equity provides a strong financial cushion for tens of millions Americans," CoreLogic President and CEO Frank Martell said. "For those most impacted by the pandemic, equity gains will help play a critical role in staving off foreclosure. Based on projected increases in economic activity and home values over the next year, we expect to see further gains in equity and a corresponding drop in negative equity, forbearance rates and foreclosure."
If you’re interested in tapping into your home’s equity, consider taking out a mortgage refinance amid the current low interest rates. A refinance could also help you lower your mortgage payment if you are struggling financially. Visit Credible’s online marketplace to compare multiple lenders at once and see which one has the best rate for you.
Home equity sits at record levels
A person's home equity is determined by how much they’ve paid down their mortgage and home price changes. In July, home price gains hit a record high of 19.7% annually, according to the latest S&P CoreLogic Case-Shiller Index Report. This boost is up from the previous month’s annual increase of 18.7%, which was also a record high.
"Home equity wealth is at a record level and will bolster economic activity in the coming year," CoreLogic Chief Economist Frank Nothaft said. "Higher wealth spurs additional consumer expenditures and also supports room additions and other investments in homes, adding to overall economic activity."
Homeowners can take advantage of their newfound equity through a cash-out mortgage refinance and use the funds for home improvement projects or to consolidate high-interest debt. Visit Credible to speak to a home loan expert and get all of your questions answered.
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