Rising Home Prices = ?
The Great News About Rising Prices
There has been a lot of talk about home prices and if they are rising too quickly. In the Denver metro area, seller supply (homes for sale) cannot keep up with the number of buyers out looking for a home. When supply is short, prices rise.
The great news about rising prices, however, is that according to CoreLogic’s US Economic Outlook, the average American household gained over $11,000 in equity over the course of the last year, largely due to home value increases.
The map below shows the average equity gain per mortgaged home from June 2015 to June 2016 (the most recent data available):
For those worried that we are doomed to repeat 2006 all over again, it is important to note that homeowners are investing their new-found equity in their homes and themselves, not in depreciating assets.
The added equity is helping families put their children through college, invest in starting small businesses, allowing them to pay off their mortgage sooner or move up to the home that will better suit their needs now.
Real Estate Bottom Line
CoreLogic predicts home prices will appreciate by another 5% by this time next year. If you are a homeowner looking to take advantage of your home equity by moving up to your dream home, let’s get together to discuss your options!