Equity in a home refers to the value of the property subtracting out the debt (mortgage amount). When the value of your home is worth more than what you paid for it, you have positive equity. CoreLogic’s Second quarter equity report shows positive and encouraging news for home-buyers looking to purchase as well as existing homeowners.
Per the equity report, 759,000 residential properties recovered equity in the 2nd quarter, increasing the number of home mortgages that are now less than their property’s value to almost 46 million, or 91 percent of properties with a mortgage. This is a huge correction since following the housing bubble, when millions of homeowners were suddenly faced with negative equity, when their homes lost significant value.
Anand Nallathambi, CoreLogic’s president and CEO suggests the negative equity stigma is shrinking for many home homeowners across the nation. He recently said, “The biggest reason for this improvement has been the relentless rise in home prices over the past three years which reflects increasing money flows into housing and a lack of housing stock in many markets.” However, with inventory for available homes for sale and condos for sale is at a low level in many real estate markets, an increase in the number of existing homeowners now having positive equity in their home could result in more properties becoming available for sale giving home-buyers more choices to choose from and reducing the rate of price gains.
Though inventory has been low in some markets, a rising number of current homeowners with positive equity could mean more homes put up for sale, giving prospective buyers more choices and reducing the rate of price gains. Read more here.