The Monica Foster Team
Menu
  • Home
  • Buyers
    • Close
    • Properties
      • Search For Homes
      • Request Home Search
      • Our Listings
      • New Listings
      • Home Walkthroughs
      • Listings Videos
    • Buyers
      • Buyer Representation
      • Luxury Home Buying
      • New Home Construction
      • American Dream TV
    •  
      • Cities / Neighborhoods
      • Relocation
      • Short Sales & Foreclosures
    • Buyer Resources
      • Buyer Videos
      • Community & School Reports
      • Area School Districts Facts
      • When Choosing a Home
      • Buyer Negotiation Process
      • Housing Programs
    •  
      • Property Disclosures
      • Ready to Buy
      • Ready to Move
      • Final Walkthrough Checklist
      • Homestead Exemption
      • Real Estate Flow Chart
    •  
      • Title Policy Rates
      • Contract to Close Process
      • Who Pays What?
      • Owning a Home
      • Mortgages
      • Mortgage Rates
      • Property Tax Records
    • Close
  • Sellers
    • Close
    • Sellers
      • Selling Your Home
      • Virtual Selling
      • Luxury Home Marketing
      • American Dream TV
    •  
      • Value My Property
      • Guaranteed Home Offer
      • Home Offer Consultant
      • Short Sale
      • Expired Listing
      • Relocation Company
    •  
      • Selecting Your Agent
      • Professional Photos
      • 3-D Tours
      • Home Staging
      • Virtual Staging
    • Seller Resources
      • Seller Videos
      • Ready To Sell
      • Priced To Sell
    •  
      • Ready To Move
      • Contract to Closing
    •  
      • Who Pays What?
      • Remodeling
      • Real Estate Flow Chart
    • Close
  • Raving Fans
  • About
  • Contact
    • Close
    • Social
      • Facebook
      • Pinterest
    •  
      • Social Wall
      • Blog
      • YouTube
    • Help
      • Ask Us
      • Join Our Team
      • Join eXp
    • Close

Realty Blog By Monica

Two Important Impacts of Home Equity

0
October 30, 2020 - General Information
20201026-KCM-Share-549x300.jpg

Equity continues to rise, helping American homeowners secure a much more stable financial future. According to the most recent data from CoreLogic, the average homeowner gained $9,800 in equity over the past year. In addition, experts project 2020 home prices to continue rising. With prices going up, equity gains will also keep accelerating. Black Knight just reported:

“The annual percent change in the overall median existing single-family-home price has skyrocketed in the past several months, with recent numbers at three to five times higher than rates seen in the past several years.”

Jeff Tucker, Senior Economist at Zillow, just qualified recent price increases as “jaw-dropping” and “within a hair’s breadth of double-digit year-over-year appreciation.”

Knowing equity will help enable many homeowners to better survive the economic distress caused by the ongoing pandemic, it’s important to break down two key homeowner benefits of increasing equity.

1. Equity Increases a Homeowner’s Options to Buy a New Home

Aside from the financial damage of the last seven months, there has also been a tremendous emotional toll on many people. Shelter-in-place mandates, quarantine requirements, and virtual schooling have all made us re-evaluate the must-have requirements a home should deliver. Having equity in your current house gives you a better opportunity to move-up or build your perfect home from scratch.

Mark Fleming, Chief Economist at First American, recently explained:

“As homeowners gain equity in their homes, they are more likely to consider using that equity to purchase a larger or more attractive home – the wealth effect of rising equity.”

If you need to make a move, the equity in your current home can help make that possible – right now.

2. Equity Enables Homeowners to Help Future Generations

An increase in home equity grows overall wealth, which can transfer to future generations. The Federal Reserve, in an addendum to their recent Survey of Consumer Finances, explains:

“There are numerous ways families can transmit wealth and resources across generations. Families can directly transfer their wealth to the next generation in the form of a bequest. They can also provide the next generation with inter vivos transfers (gifts), for example, providing down payment support to enable a home purchase or a substantial wedding gift.”

The Federal Reserve also explains another way wealth (including the additional net worth generated by an increase in home equity) can benefit future generations:

“In addition to direct transfers or gifts, families can make investments in their children that indirectly increase their wealth. For example, families can invest in their children’s educational success by paying for college or private schools, which can in turn increase their children’s ability to accumulate wealth.”

Bottom Line

Equity can help a homeowner grow their confidence in a more stable financial future. It provides near-term move-up options and creates a positive impact for future generations. In many cases, the largest single investment a person has is their home. As that investment appreciates in value, financial options increase too.

Monica Foster October 30, 2020
Tags:   For Buyersfor sellersMove-Up BuyersPricing

RELATED POSTS

  • 13813 Bahia Bay Dr

NO COMMENTS

Leave a comment Cancel reply

Your email is never published or shared.

SubscribeSubscribe to Blog

Recent Posts

  • Wonderful Cul-de-sac 3BD 2BA Home For Sale in League City
  • Classic Corner 4BD 3BA Home For Sale in League City
  • Stunning 2 Story 4BD 2.1BA Home For Sale in Rosharon
  • Stunning 4BD 3.1BA Home For Sale in Katy
  • Stunning 3BD 3BA Home For Sale in Rosharon

Categories

  • General Information
  • Home Walkthrough
  • Investment Properties
  • Lifestyle
  • New Listings
  • News
  • Sold Listings
  • Vacation Rentals

Our Social Networks

Our Social Networks

Brokered by eXpRealty

Certified Residential Specialist
Accredited Buyer Representative
Certified New Home Specialist
Accredited Staging Professsional
Certified Luxury Home Marketing Specialist
Seller Representative Specialist

Monica M. Foster

Monica M. Foster
The Monica Foster Team

Houston – Clear Lake – League City
Pasadena – Baytown – Beaumont
Galveston – Pearland – Sugarland
Katy

Main: 346.202.7307

Contact Us

© 2024 Monica Foster Team  • 

Terms of Use  •  Privacy Policy
Texas Real Estate Commission Information About Brokerage Services
Texas Real Estate Commission Consumer Notice