What You Need To Know About Home Equity

Current homeowners saw a significant increase in their net worth over the past several years as a result of growing home prices. Your home equity played a part in that rise in wealth. If you wish to make a change, you should be aware of how equity functions and how it might assist you in meeting your changing needs.

What Is Home Equity?
Equity is the current value of your home minus what you owe on the loan. Over time, you build equity as you make your monthly mortgage payments and as home prices appreciate. It works like this:

The Reason Your Equity Has Increased Recently
Because there was a considerable mismatch between the number of homes available for sale and the number of purchasers eager to make a purchase over the past few years, home prices climbed dramatically. And although though the housing supply has increased in 2022 compared to more typical market years, it is still low.

That is why, the average homeowner's equity increased by $60,000 over the previous 12 months, according to CoreLogic's most recent Homeowner Equity Insights.

While the national average is $60,000, the map below shows what occurred locally on average over the previous year: