How Do Rising Prices Impact Your Home Equity?

KCM Crew, August 16th, 2016

20160816 KCM ShareYesterday, we shared the results of the latest Home Price Expectation Survey by Pulsenomics. One of the big takeaways from the survey is that over the next five years, home prices will appreciate 3.5% per year on average, and cumulatively will grow by around 18%.

So what does this mean for homeowners and their equity position?

For example, let’s assume a young couple purchased and closed on a $250,000 home in January of this year. If we only look at the projected increase in the price of that home, how much equity would they earn over the next 5 years? How Do Rising Prices Impact Your Home Equity? | Keeping Current MattersSince the experts predict that home prices will increase by 4.5% this year alone, the young homeowners will have gained over $11,000 in equity in just one year. Over a five-year period, their equity will increase by over $46,000! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.

Bottom Line

Not only is homeownership something to be proud of, it also offers you and your family the ability to build equity you can borrow against in the future. If you are ready and willing to buy, find out if you are able to today!

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This entry was posted in Financing, Home Buying, Home Selling, Homeownership, Market Conditions, Quality of Life and tagged , , , , , , . Bookmark the permalink.

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