While watching the stock market recently may have become difficult, checking the value of your home should provide welcome relief in this volatile time. If you own a home, rising home prices have increased your net worth significantly in recent years. And that increase in wealth came in the form of increased home equity. This is how it works.

Equity is the current value of your home minus what you owe on the loan. Home prices increased significantly over the last few years due to a significant imbalance between the number of homes available for sale and the number of buyers looking to make a purchase. While rising inventory and mortgage rates have cooled the market in recent months, national home prices remain strong.

That’s why, according to the latest Homeowner Equity Insights from CoreLogic, the average homeowner equity has grown by $60,000 over the last 12 months. While that’s the national number, if you want to know what happened, on average, over the past year in your area, look at the map below from CoreLogic:

Why This Is So Important Right Now

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), helps explain why this matters so much today:

“. . . the decline in the stock market has dented overall net wealth. It has fallen by $6 trillion from the first to the second quarter. Only housing wealth has held on, with homeowners’ real estate wealth (home value minus mortgage balance) rising by $1.2 trillion.”

While equity contributes to your overall net worth, it can also help you achieve other goals, such as purchasing your next home. When you sell your current home, the equity you've built up is returned to you, and it could be enough to cover a large portion - if not all - of the down payment on your next home.

Bottom Line

There’s volatility in today’s stock market, but home equity is still incredibly strong. To find out just how much equity you have in your current home, let’s connect.