Hey everyone, seems the nice weather is finally gone and now comes the cold.
On a brighter note, however, if you are a home owner you have a lot to be happy about. The equity in your home is beginning to build up. Now let me explain what home equity means really quick for those of you who are unsure. Home equity is the value of the interest held on a piece of property. For example, if you paid $300,000 for a home, your interest or equity in that property is $300,000. Now if that property increases its value over the next year to $315,000 then your interest (equity) in the property is now $315,000. Simple enough, right? Well that is exactly what is happening now, home owners interest in their property is beginning to increase which means these home owners are gaining money. Home values are increasing steadily and its beginning to have a real effect. Home equity has reached its highest point since the burst of the housing bubble and it has increased by $860 billion since last year. Due to this increase, approximately 1.3 million families have been relieved from being "underwater" or owing more money for their mortgage than their house was actually worth. The actual amount of home owners underwater is now 10.8 million, which might get the reaction WHOA thats a lot, and your right, it definitely is. However, compared to last year's number of 12.1 million, we saw an 11% decrease from '11 to '12; it is obvious that we are making strides in the right direction. This really is great news for the housing market but also for the economy in general. More equity in the hands of the people is always a good thing. To continue with the facts, August put forth the highest amount of existing home sales in more than two years. “Our housing market is showing important signs of recovery—with home owner equity at a four-year high and summer sales of existing homes at the strongest pace in two years,” says Erika Poethig, acting assistant secretary at the U.S. Department of Housing and Urban Development.
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