Home equity continued to improve in the fourth quarter of 2018, with a lot of homeowners profiting over rising home values. U.S. homeowners having a mortgage saw their equity rise by 8.1% year over year in the fourth quarter of 2018, as outlined by CoreLogic’s Home Equity Report, released Thursday.
Homeowners 8% Wealthier In the last Year
The majority of homeowners have gained $9,700 in home equity between the fourth quarter of 2017 and the fourth quarter of 2018, the report showed. Western states saw probably the most significant annual gains. Nevada homeowners, as an example, saw a boost of $29,400 in home equity over the past year, and Hawaii homeowners saw gains of approximately $26,900.
“As home prices rise, significantly more people are choosing to remodel, repair or upgrade their existing homes,” said Frank Martell, president and CEO of CoreLogic. “The increase in home equity over the past several years provides homeowners with the means to finance home remodels and repairs. With rates still ultra-low by historical standards, home-equity loans provide a low-cost method to finance home-improvement spending. These expenditures are expected to rise 5 percent in 2019.”
The volume of homes having a mortgage in negative equity-where the homeowner’s loan balance is more than the home’s current worth-was at 2.2 million, or 4.2% of all mortgaged properties in the fourth quarter.
However, with predictions of a 4.5% rise in home values during the next year, about 350,000 homeowners may very well be lifted from being underwater and restored to positive equity, says Frank Nothaft, CoreLogic’s chief economist.
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