Home equity is a leading factor in the housing market. Currently, homeowners today have more value in their homes than what they owe, which means homeownership has never looked better.
Owning a home is one of the greatest ways to build wealth over time.
Of course, you have to pay your mortgage on a regular basis and maintain the property to keep it in good shape. But other than that, all you have to do is sit back and allow your home’s value to appreciate over time. Before you know it, you may have far more in home equity than you may have thought.
That’s exactly what’s happening to homeowners all across the country, especially in the Pacific Northwest in states like Washington, Oregon, Idaho, and Colorado. According to data from CoreLogic and Q4 data based on US homeowners with mortgages (which accounts for roughly 62% of all properties), the average increase in home equity over the recent past in the US is $26,300.
But certain states far exceed that average, including WA, CO, OR, and ID. More specifically, here’s how these four states fared according to the data recently collected:
Average equity gain:
- WA – $47,000
- OR – $32,000
- ID – $48,000
- CO – $32,000
Home Price Appreciation in WA, ID, OR, and CO
To give you some perspective on how much homes have increased in price over the past year, let’s take a look at where prices are at today – in March 2021 – relative to where they were last year.
- Washington. The average home price is currently $478,015. Home prices have increased 13.3% since March 2020.
- Oregon. The average home price is currently $409,182. Home prices have increased 10.9% since March 2020.
- Colorado. The average home price is currently $449,182. Home prices have increased 9.6% since March 2020.
- Idaho. The average home price is currently $359,546. Home prices have increased 20.9% since March 2020.
As you can see from the above numbers, the prices of homes in these four states have increased a great deal in just a 12-month span of time. That’s a lot of equity accumulated in such a short period of time.
If homeowners in these states were to sell today, they would realize hefty profits. And the longer they hold on to their properties, the more equity they can expect to see in the years to come, as real estate always appreciates over time, despite potential blips here and there.
Home Equity Can Open Many Doors
Having equity in your home can open up many financial possibilities for you. Aside from helping you realize a healthy profit when or if you sell, you can also use that equity to cover the cost of major expenses.
For instance, you may need a sizable amount of money to pay for a major home renovation, your child’s college tuition, a big family vacation, or an urgent medical expense.
You can use the equity in your home to cover these costs through financial products such as a second mortgage or a Home Equity Line of Credit (HELOC). With equity, you can borrow from your own home without having to go through the process of applying for a traditional personal loan.
Do You Want to Add an Equity-Building Asset to Your Portfolio?
If you are not yet a homeowner but are looking to become one in the near future, now may be the perfect time to get into the market. Today’s home price appreciation is driving equity higher throughout the country. If your needs are changing and you’re ready for a new home, your equity may be a great asset to power your next move.
Do you have questions about home loans? Are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington, serving the entire state, as well as Oregon, Idaho, and Colorado. We offer many mortgage programs to buyers all over the Pacific Northwest and have been doing so since 1992. Contact us today with any questions you have about mortgages.