Monday
December 22, 2014

For Those Who Held On, Equity Has Returned

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For Those Who Held On, Equity Has Returned

Home 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. 

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 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. 

Source: “Housing Equity 2013,” National Association of REALTORS® Economists’ Outlook Blog (Dec. 20, 2013)

Read more: 

Home Owners Stand to Recapture More Equity in 2014