Nearly three trillion dollars. That’s how much homeowners gained on their home equity in the second quarter alone of 2021. Home equity is simply the market value of the home minus the loan balance. As prices rise, more and more homeowners are building wealth through home equity.
The $2.9 trillion gain represents about 30% growth from the same time one year ago. On average, homeowners gained $51,500 in positive equity over the reporting time period.
California, Washington, Hawaii, Idaho, Utah and Arizona enjoyed the biggest equity gains.
Home equity growth is at record levels and should help move the economy in a positive direction as the nation looks forward to the end to the pandemic. In many ways, the growth provides countless Americans with some much-needed financial wiggle room to pursue their goals, including home purchase and refinance.
Additional gains are expected in the coming months, which will cushion the financial picture even more for homeowners.
Rising consumer confidence is a major driver for the increased equity. More and more families are taking advantage of lower interest rates and home affordability in financing a home.
Consumer confidence recently rose to its highest levels since the beginning of the pandemic. A survey by CoreLogic, in fact, revealed that about 60% of respondents are confident about their ability to stay on track and take on a mortgage in the coming years.
During this fruitful period in the real estate market and overall economy, many homeowners may wonder how they can leverage their accumulated equity for the greater good.
A refinance program can work wonders and accomplish a number of goals. By refinancing, homeowners can take advantage of a lower interest rate. In effect, they lower the amount of money they pay to finance their loan and even lower their monthly payment.
A cash-out refinance is another strategic option. When homeowners take out a cash-out refinance, they can borrow alongside their equity. The proceeds will be folded into a new, lower-rate mortgage. As a result, homeowners can consolidate high-interest debt at a much better value, make a big purchase, take on a home remodeling project or put funds away for future use.
To learn more about the refinance possibilities and how you can make the most out of your home equity by lowering your payment or pulling out cash, please contact us to learn more.
By refinancing your existing loan, the total finance charges may be higher over the life of the loan.