Every year, households across the country decide to rent for another year or take the leap into homeownership. They look at their earnings and savings and then decide what makes the most financial sense. That equation will most likely consider monthly housing costs, tax advantages, and other incremental expenses. Using these measurements, recent studies show that it’s still more affordable to own than rent in most of the country.
What has this equity piece meant to homeowners in the past?
ATTOM Data Solutions, the curator of one of the nation’s premier property databases, just analyzed the typical home-price gain owners nationwide enjoyed when selling their homes. Here’s a breakdown of their findings: The typical gain in the sale of the home (equity) has increased significantly over the last five years.
CoreLogic, another property data curator, also weighed in on the subject. According to their latest Homeowner Equity Insights Report, the average homeowner gained $17,000 in equity in just the last year alone.
What does the future look like for homeowners when it comes to equity?
Here are the seven major home price appreciation forecasts for 2021:The National Association of Realtors (NAR) just reported that today, the country’s median-priced home sells for $309,800. If homes appreciate by 5% this year (the average of the forecasts), the homeowner will increase their wealth by $15,490 in 2021 through increased equity.
As you make your plans for the coming year, be sure to consider the equity benefits of home price appreciation as you weigh the financial advantages of buying over renting. When you do, you may find this is the perfect time to jump into homeownership.