California homeowners gain an average of $119,000 of equity in one year

Green Escrow | Real Estate News

According to a new report by CoreLogic, California homeowners increased their equity by an average of $119,000 in one year. Nationwide, this comes to an increase of 31 percent.

This is especially good news for the 1.2 million homeowners who reached the end of forbearance in September, as this increase in equity is a buffer against foreclosure.

Meanwhile, most analysts see this trend continuing, although at a lower rate. Fannie Mae estimates that home prices will increase by 7.4 percent in 2022, followed by a 2.9 precent rise in 2023.

U.S. Homeowners Equity Continues to Increase

Green Escrow Services | Adding value to home

One of the positives of the continued home price appreciation is the amount of equity that homeowners can borrow against has increased significantly, especially in California. Currently 40 million homeowners in the U.S. have at least 20 percent equity in their homes.

40 percent of the nation’s tappable home equity is in California.

three of the top five of metro areas in the U.S. with the most home equity are in California including San Francisco, San Jose, and Los Angeles.

More Homes Have Positive Equity

Green Escrow Services | Adding value to home

A recent report by CoreLogic states that nation-wide 47.9 million home – or 93.7 percent of those having a mortgage – now have positive equity.

Moreover, 95.2 of California homeowners have positive equity and San Francisco leads the nation with 99.4 percent as of the third quarter, 2016.

Of course, equity gains are due in large part to continually rising home prices – certainly a constant in the Bay Area – but also to favorable mortgage rates.

The report notes that mortgage rates remain relatively low but have risen for six consecutive weeks since the presidential election as are expected to continue to raise, particularly if the Federal Reserve raises interest rates next week.

Homeowners’ Equity Holdings Continues to Increase

Real Estate Growth

The value of American homeowners’ equity holdings – market value of homes minus the home loans – increased by nearly $2.1 trillion in 2013 to nearly $10 trillion. In addition nearly 4 million homeowners were able to rise above the negative equity of their homes thanks largely to increasing prices. According to the latest research, nearly 43 million owners with mortgage debt have positive equity. however, approximatelyly 6.5 million owners are still in negative equity positions, which, however, is down dramatically from more than 10 million a year ago and 12 million in 2009.