Home Equity Returns For Homeowners Who Held On

Home EquityHome prices surged 11.3 percent this year compared to 2012, the latest housing data by the National Association of REALTORS® shows. A rise in home prices has pulled more home owners out from underwater with the return of equity this year, NAR notes.

Home Equity Increases

 
On NAR’s Economists’ Outlook blog, researchers explain that a borrower who bought a median-priced home in 2004 and held it for nine years – the average tenure in a home – would now have $28,114 in equity (includes combined price appreciation and paying down mortgage principle).

A home owner who purchased a median priced home in 2012 would have more than $23,000 in home equity, according to NAR research.

Home owners who purchased in 2006  and 2007 – during the peak of the market – have faced the biggest falls in home prices, but NAR researchers note they are “nearly in positive equity” territory. A home owner who bought a home in 2006, for example, and owned through 2012 would have been underwater by about $28,200. However, by this year, that downfall has lessened to $4,700.

Home owners who bought since 2007 are mostly in positive equity, according to NAR research.

A study released last week by CoreLogic showed that more home owners were regaining equity. About 13 percent of all homes with a mortgage remain in negative equity by the end of the third quarter, compared to 14.7 percent who stood in negative equity at the end of the second quarter.

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