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Loudoun County Real Estate Market Outlook in 2021

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Loudoun County Overview

Loudoun County is among the most popular destinations for prospective homeowners who want to live in a safe area where there are great opportunities for every member of the family. Along with a sterling education system, popular attractions, and delicious eateries, Loudoun County has something to offer for everyone. As the third-most populous county in Virginia, this county has the highest median household income across all U.S. districts with a population that's higher than 65,000. This guide provides you with a comprehensive view of Loudoun County real estate and what you can expect when buying or selling a home.


Current Market Health

In most counties throughout the U.S., the real estate market is healthy for buyers and sellers alike. The same is true for Loudoun County. While December and January typically represent the slowest months for home sales, well over 400 units were sold in the county during each of the two months, which is significantly higher than the number sold the previous year. When looking specifically at home sales in March 2021, exactly 614 homes were sold, which is an increase of five percent over home sales during March 2020.

The main reason that more homes have been sold lately is because of the extremely low-interest rates that have been set by the Federal Reserve. If you're in the market for a new home, now is the time to buy. However, the increased demand by consumers means that now is also a great time to list your property. With so many buyers on the market, you could benefit from competing offers that allow you to sell your home at a price that's higher than the initial listing price.

Because of how quickly homes are being sold, active inventory is somewhat low. Over the past year, active inventory in Loudoun County has decreased by just over 70 percent. As of April 2021, there were 240 homes on the market. In March 2021, homes only remained on the market for an average of 11 days before being sold, which is a decrease of nearly 60 percent when compared to March 2020.

Even though there weren't as many active listings by the end of March, the number of new listings during March 2021 was right around 960, which is only a three percent decrease when compared to the same month last year. The number of pending contracts was also significantly higher in March 2021. In March 2020, around 685 homes were in a contract, which meant that the sale was pending. During the same month this year, more than 900 homes were under contract, which is a 32 percent increase.

What these numbers show you is that the real estate market in Loudoun County is healthier than ever. While you should be able to find the home of your dreams as a buyer, it's important to understand that the Loudoun County real estate market is currently a seller's market. As a buyer, you will likely need to make a high offer if you want the seller to accept. It's likely that competing bids will be placed alongside yours. Despite the higher competition, you should be able to find your dream home with the right real estate agent by your side.

If you're thinking about placing your home on the market, your home appraisal may provide you with a higher value than you anticipated. The increased demand for homes across the Loudoun County real estate market has caused home values to increase significantly. As long as you don't list your home at a much higher price than it's valued at, your home shouldn't remain on the market for too long.


Average Sale Price

The median sale price for a home in Loudoun County was over $575,000, which is an increase of around six percent compared to the same month last year. On the other hand, the median sale price for March 2021 was two percent lower than it was in February 2021. Once you obtain a home appraisal, it's important to understand that you don't need to automatically accept the results. If the appraisal comes in at a lower value than you anticipated, you could request an additional appraisal from someone else.


Things to Do Around Loudoun County

Located just 25 miles away from Washington D.C., Loudoun County has a rich culture that any homeowner is able to benefit from. As mentioned previously, this county has one of the highest median household incomes across the U.S., which is due primarily to the county being known as a fantastic place to live for families. First of all, Loudoun County is considered to be wine country because of the 40 different wineries and tasting rooms that you can find throughout the beautiful slopes and hills that are located in the county.

Along with vintners and barrel tastings, residents of Loudoun County have access to plenty of golf courses, yoga classes, spa treatments, music concerts, grape-stomping events and more. Keep in mind that there are also more than 30 breweries throughout the county that can provide you with some of the most delicious ales in Virginia.

If you want to spend time outside with your friends and family, Loudoun County offers many recreational activities for you to partake in, the primary of which include ziplining, white water rafting on the Potomac River, and hiking along the many trails and parks that are located in the county. Consider stopping by the Banshee Reeks Nature Preserve or Edgar Tillett Memorial Park to see a glimpse of what Loudoun County has to offer.


Schools in Loudoun County

Residents of Loudoun County are served directly by Loudoun County Public Schools, which is the fifth-largest school system in Virginia. When looking at the quality of the school system in Loudoun County, it has the highest ratings for any county in Virginia with an overall Niche grade of A+. Whether you send your child to a public school or private school, you can be confident that they'll receive an exemplary education.


Restaurants in Loudoun County

Another reason that the Loudoun County real estate market has been healthy for many years is because of the variety of restaurants and eateries that are available to county residents. When all you want is a quick bite to eat, the Market Table Bistro and Buford's Biscuits are two of the top-rated cafes and diners in the county. For high-end fare that you can't find anywhere else, Magnolias at the Mill and the Tuscarora Mill Restaurant are among the most popular and oft-visited restaurants in the county. Both of these restaurants specialize in New American cuisine.


Planning to Buy or Sell A Home in Loudoun County?

Whether you're in the market for a new home or would like to list your current property, the Loudoun County real estate market is one of the strongest in the state. Residents of Loudoun County have access to some of the best restaurants, schools, events, attractions, and parks in Virginia, which makes it a highly appealing place to live. Call Kelly Gaitten today at Berkshire Hathaway to get started with the home-selling process. Kelly is a long-time resident of Loudoun County and as a Top Seller award-winning agent at Berkshire Hathaway, she is extremely resourceful and equipped with the local experience required to tackle all of your Loudoun County real estate needs!

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Home Prices Will Continue Appreciating

blue line chart going up against yellow background

 

How Strong is the Housing Market?

It’s clear that consumers are concerned about how quickly home values are rising. Many people fear the speed of appreciation may lead to a crash in prices later this year. In fact, Google reports that the search for “When is the housing market going to crash?” has actually spiked 2450% over the past month.

In addition, Jim Dalrymple II of Inman News notes:

“One of the most noteworthy things that came up in Inman’s conversations with agents was that every single one said they’ve had conversations with clients about whether or not the market is heading into a bubble.”

To alleviate some of these concerns, let’s look at what several financial analysts are saying about the current residential real estate market. Within the last thirty days, four of the major financial services giants came to the same conclusion: the housing market is strong, and price appreciation will continue. Here are their statements on the issue:

Goldman Sachs’ Research Note on Housing:

“Strong demand for housing looks sustainable. Even before the pandemic, demographic tailwinds and historically-low mortgage rates had pushed demand to high levels. … consumer surveys indicate that household buying intentions are now the highest in 20 years. … As a result, the model projects double-digit price gains both this year and next.”

Joe Seydl, Senior Markets EconomistJ.P.Morgan:

“Homebuyers—interest rates are still historically low, though they are inching up. Housing prices have spiked during the last six-to-nine months, but we don’t expect them to fall soon, and we believe they are more likely to keep rising. If you are looking to purchase a new home, conditions now may be better than 12 months hence.”

Morgan Stanley, Thoughts on the Market Podcast:

“Unlike 15 years ago, the euphoria in today’s home prices comes down to the simple logic of supply and demand. And we at Morgan Stanley conclude that this time the sector is on a sustainably, sturdy foundation . . . . This robust demand and highly challenged supply, along with tight mortgage lending standards, may continue to bode well for home prices. Higher interest rates and post pandemic moves could likely slow the pace of appreciation, but the upward trajectory remains very much on course.”

Merrill Lynch’s Capital Market Outlook:

“There are reasons to believe that this is likely to be an unusually long and strong housing expansion. Demand is very strong because the biggest demographic cohort in history is moving through the household-formation and peak home-buying stages of its life cycle. Coronavirus-related preference changes have also sharply boosted home buying demand. At the same time, supply is unusually tight, with available homes for sale at record-low levels. Double-digit price gains are rationing the supply.”

Bottom Line

If you’re concerned about making the decision to buy or sell right now, let’s connect to discuss what’s happening in our local market.

Are Interest Rates Expected to Rise Over the Next Year?

red percent sign amongst white dollar signs

 

So far this year, mortgage rates continue to hover around 3%, encouraging many hopeful homebuyers to enter the housing market. However, there’s a good chance rates will increase later this year and going into 2022, ultimately making it more expensive to borrow money for a home loan. Here’s a look at what several experts have to say.

Danielle Hale, Chief Economistrealtor.com:

Our long-term view for mortgage rates in 2021 is higher. As the economic outlook strengthens, thanks to progress against coronavirus and vaccines plus a dose of stimulus from the government, this pushes up expectations for economic growth . . . .”

Lawrence Yun, Chief EconomistNational Association of Realtors (NAR):

In 2021, I think rates will be similar or modestly higher . . . mortgage rates will continue to be historically favorable.”

Freddie Mac:

We forecast that mortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.”

Below are the most recent mortgage rate forecasts from four top authorities – Freddie MacFannie Mae, the Mortgage Bankers Association (MBA), and NAR:

 

mortgage rate projections 2021 and 2022

 

Bottom Line

If you’re planning to buy a home, purchasing before mortgage interest rates rise may help you save significantly over the life of your home loan.

4 Big Incentives for Homeowners to Sell Now

keys hanging from open door lock

 

Homeowner Concerns for Selling

The housing market keeps sailing along. The only headwind that could take it off course is the lack of inventory for sale. The National Association of Realtors (NAR) reports that there were 410,000 fewer single-family homes for sale this March than in March of 2020. The key to continued success in the residential housing market is for more listings to come on the market. However, many homeowners are concerned that selling their homes could be challenging for several reasons.

Recently, Homes.com released the findings of a survey that identified these concerns, as well as what it will take for homeowners to feel comfortable selling their houses. Here are the four major homeowner concerns and a quick explanation of what’s actually happening in the housing market today.

 

1. Homeowners don’t know if they’ll be able to secure their next home before selling.

In negotiations, leverage is the power that one side may have to influence the other side while moving closer to their negotiating position. A party’s leverage is based on the ability to award benefits or eliminate costs on the other side.

In today’s market, buyers have compelling reasons to purchase a home now:

  • To own a home of their own
  • To buy before prices continue to appreciate
  • To secure a mortgage at a historically low rate, while they last

These buyer needs give the seller tremendous leverage. Most already realize this leverage enables the homeowner to sell at a good price. However, this leverage may also be used to negotiate time to find their next home. The homeowner could sell their home to the buyer at today’s price, which will enable the purchaser to take advantage of current mortgage rates. In return, the buyer might lease the house back to the seller for a pre-determined length of time while the seller finds a new home or has one built.

This gives the buyer what they want while also giving the seller what they need. It’s a true win-win negotiation.

 

2. Homeowners don’t know if their current home will sell for the asking price or top market price.

This is the perfect time to maximize profits while selling a house. NAR just released a study showing that bidding wars are at an all-time high. The study reveals that when comparing the first quarter of last year to the first quarter of this year, the number of offers on homes for sale doubled from an average of 2.4 to 4.8 offers.

Whenever there’s a bidding war, the price of the item for sale escalates. Bloomberg recently reported:

“For the first time ever, the average U.S. home is selling for above its list price.”

If a seller is looking for a top-dollar sale, there’s no better time to sell than right now.

 

3. Homeowners don’t know if they will get an offer without their home requiring work or updates.

Again, leverage is the greatest strength a seller has in this market. Due to the lack of homes for sale, many buyers are more willing to take on home improvement projects themselves in order to get the home they’re after.

A recent post on whether or not to renovate before selling notes:

“It may be wise to let future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. As a seller, your dollars and time might be better spent working on small cosmetic updates, like refreshing some paint and power washing the exterior. Instead of over-investing in your home with upgrades that the buyers may change anyway, work with a real estate professional to determine the key projects that will maximize your listing, without overdoing it.”

If a seller is worried about doing work or updates on their home, they must realize that today’s historically low inventory likely renders these projects less critical to the sale of the house.

 

4. Homeowners don’t know if they can have a quick closing process.

When speed is important, there are two points sellers should look at:

  • The time it takes to find a buyer for the home
  • The time it takes to close the transaction

In the latest Existing Home Sales Report, NAR explains:

“Properties typically remained on the market for 18 days in March, down from 20 days in February and from 29 days in March 2020. Eighty-three percent of the homes sold in March 2021 were on the market for less than a month.”

Eighteen days is fast, and it’s a new record. Here are the days the average house is on the market in each state:

 

Days on the Market reflected on U.S. map by states

 

Regarding the time it will take to close the transaction, all-cash sales accounted for 23% of all home purchase transactions in March. All-cash sales can usually be closed in thirty days.

If a mortgage is necessary, the most recent Origination Insight Report from Ellie Mae shows:

“Time to close all loans decreased in March. The average time to close a purchase fell to 51 days, down from 53 the month prior.”

If you’re looking for a quick closing process, there’s never been a market in which the two-step process (finding a buyer and closing the deal) has taken less time.

 

Bottom Line

Selling your house can be daunting, especially in a fast-paced market. However, the fact that we’re in such a strong sellers’ market clearly eliminates many common concerns. Let’s connect today so you can learn more about the opportunities for homeowners who are ready to sell.

4 Tips to Maximize the Sale of Your House

maximize sale of house

 

How Can A Seller Maximize the Sale of their House?

Homeowners ready to make a move are definitely in a great position to sell today. Housing inventory is incredibly low, driving up buyer competition. This gives homeowners leverage to sell for the best possible terms, and it’s fueling a steady rise in home prices.

In such a hot market, houses are selling quickly. According to the National Association of Realtors (NAR), homes are typically on the market for just 18 short days. Despite the speed and opportunity for sellers, there are still steps you can take to prep your house to shine so you get the greatest possible return.

 

1. Make Buyers Feel at Home

One of the ways to make this happen is to take time to declutter. Pack away any personal items like pictures, awards, and sentimental belongings. The more neutral and tidy the space, the easier it is for a buyer to picture themselves living there. According to the 2021 Profile of Home Staging by NAR:

“82% of buyers’ agents said staging a home made it easier for a buyer to visualize the property as a future home.”

Not only will your house potentially attract the attention of more buyers and likely sell quickly, but the same report also notes:

“Eighteen percent of sellers’ agents said home staging increased the dollar value of a residence between 6% and 10%.”

As Jessica Lautz, Vice President of Demographics and Behavior Insights for NAR, says:

“Staging a home helps consumers see the full potential of a given space or property…It features the home in its best light and helps would-be buyers envision its various possibilities.”

 

2. Keep It Clean

On top of making an effort to declutter, it’s important to keep your house neat and clean. Before a buyer stops by, be sure to pick up toys, make the beds, and wash the dishes. This is one more way to reduce the number of things that can distract a buyer from the appeal of the home.

Ensure your home smells fresh and clean as well. Buyers will remember the smell of your house, and according to the same report from NAR, the kitchen is one of the most important rooms of the house to focus on if you want to attract more buyers.

 

3. Give Buyers Access

Buyers are less likely to make an offer on your house if they aren’t able to easily schedule a time to check it out. If your home is available anytime, that opens up more opportunities for multiple buyers to go from curious to eager. It also allows buyers on tight schedules to still get in to see your house.

While health continues to be a great concern throughout the country, it’s important to work with your agent to find the best safety measures and digital practices for your listing. This will drive visibility and create access options that also keep everyone in the process safe.

 

4. Price It Right

Even in a sellers’ market, it’s crucial to set your house at the right price to maximize selling potential. Pricing your house too high is actually a detriment to the sale. The goal is to drive high attention from competing buyers and let bidding wars push the final sales price up.

Work with your trusted real estate professional to determine the best list price for your house. Having an expert on your side in this process is truly essential.

 

Bottom Line

If you want to sell on your terms, in the least amount of time, and for the best price, today’s market sets the stage to make that happen. Let’s connect today to determine the best ways to maximize the sale of your house this year.

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    Financial Benefits of Homeownership

    financial benefits of homeownership

    The Top 4 Financial Benefits of Homeownership 

    Fannie Mae survey recently revealed some of the most highly-rated benefits of homeownership, which continue to be key drivers in today’s power-packed housing market. Here are the top four financial benefits of owning a home according to consumer respondents:

    • 88% – a better chance of saving for retirement
    • 87% – the best investment plan
    • 85% – the chance to be better off financially
    • 85% – the chance to build up wealth

    Additional financial advantages of homeownership included in the survey are having the best overall tax situation and being able to live within your budget.

    Does homeownership actually give you a better chance to build wealth?

    No one can question a person’s unique feelings about the importance of homeownership. However, it’s fair to ask if the numbers justify homeownership as a financial asset.

    Last fall, the Federal Reserve released the Survey of Consumer Finances, a report done every three years, with the latest edition covering through 2019. Their findings confirmed that homeownership is a clear financial benefit. The survey found that homeowners have forty times higher net worth than renters ($255,000 for homeowners compared to $6,300 for renters).

    The difference in net worth between homeowners and renters has continued to grow. Here’s a graph showing the results of the last four Fed surveys:

    The gap in net worth is widening

    The above graph only includes data through 2019, but according to CoreLogic, the equity held by homeowners grew by $26,300 over the last twelve months alone. That means the gap between the net worth of homeowners and renters has probably widened even further over the last year.

    Some might argue the difference in net worth may be due to homeowners normally having larger incomes than renters and therefore the ability to save more money. However, a study by First American shows homeowners have greater net worth than renters regardless of their income level. Here are the findings:

    net worth is far greater for homeowners in every income category

    Others may think homeowners are older and that’s why they have a greater net worth. However, a Joint Center for Housing Studies of Harvard University report on homeowners and renters over the age of 65 reveals:

    “The ability to build equity puts homeowners far ahead of renters in terms of household wealth…the median owner age 65 and over had home equity of $143,500 and net wealth of $319,200. By comparison, the net wealth of the same-age renter was just $6,700.”

    Homeowners 65 and older have 47.6 times greater net worth than renters.

    Bottom Line

    The idea of homeownership as a direct way to build your net worth has met the test of time. Let’s connect if you’re ready to take steps toward becoming a homeowner.

     

    How a Change in Mortgage Rate Impacts Your Homebuying Budget

    Change in mortgage rate

    Mortgage rates are on the rise this year, but they’re still incredibly low compared to the historic average. However, anytime there’s a change in the mortgage rate, it affects what you can afford to borrow when you’re buying a home. As Sam Khater, Chief Economist at Freddie Macshares:

    Since January, mortgage rates have increased half a percentage point from historic lows and home prices have risen, leaving potential homebuyers with less purchasing power.” (See graph below):z

    2021 Mortgage Rates

    When buying a home, it’s important to determine a monthly budget so you can plan for and understand what you can afford (Try our mortgage calculator here for free!). However, when you need to stick to your budget, even a small increase in the mortgage rate can make a big difference.

    According to the National Association of Realtors (NAR), today, the median existing-home price is $313,000. Using $300,000 as a simple number close to the median price, here’s an example of how a change in mortgage rate impacts your monthly principal and interest payments on a home.

    Buyer's purchasing power graph

     

    If, for example, you’re getting ready to buy a home and know your budget allows for a monthly payment of $1200-1250 (marked in gray on the table above), every time the mortgage rate increases, the loan amount has to decrease to keep your monthly cost in range. This means you may have to look for lower-priced homes as mortgage rates go up if you want to be able to maintain your budget.

    In essence, it’s ideal to close on a home loan when mortgage rates are low, so you can afford to borrow more money. This gives you more purchasing power when you buy a home. Mark Fleming, Chief Economist at First American, explains:

    “Monthly payments have remained manageable despite soaring home prices because of low mortgage rates. In fact, monthly payments remain below the $1,250 to $1,260 range that we saw in both fall 2018 and spring 2019, but they are on track to hit that level this spring.

    Although they remain low, mortgage rates have begun to increase and are expected to rise further later in the year, thus affordability will test buyer demand in the months ahead and likely help slow the pace of price growth.”

    Today’s mortgage rates are still very low, but experts project they’ll continue to rise modestly this year. As a result, every moment counts for homebuyers who want to secure the lowest mortgage rate they can in order to be able to afford the home of their dreams.

    Bottom Line

    Thanks to low mortgage rates, the spring housing market’s in bloom for buyers – but these favorable conditions may not last for long. Let’s connect today to start the home buying process while your purchasing power is still holding strong.

    How to Sell Your Home More Efficiently in A Seller's Market

    how to sell your home with an agent

    Is it Better to Sell Your Home On Your Own?

    In a sellers’ market, some homeowners might be tempted to try to sell their house on their own (known as For Sale By Owner, or FSBO) instead of working with a trusted real estate professional. When the inventory of homes for sale is as low as it is today, buyers are eager to snatch up virtually any house that comes to market. This makes it even more tempting to FSBO rather than seek the help of an agent to sell your home. As a result, some sellers think selling their house will be a breeze and see today’s market as an opportunity to FSBO. Let’s unpack why that’s a big mistake and may actually cost you more in the long run.

    According to the Profile of Home Buyers and Sellers published by the National Association of Realtors (NAR), 41% of homeowners who tried to sell their house as an FSBO did so to avoid paying a commission or fee. In reality, even in a sellers’ market, selling on your own likely means you’ll net a lower profit than when you sell with the help of an agent.

    The NAR report explains:

    FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $217,900 in 2020 (up from $200,000 in 2019), and still far lower than the median selling price of all homes at $242,300. Agent-assisted homes sold for a median of $295,000…Sellers who began as a FSBO, then ended up working with an agent, received 98 percent of the asking price, but had to reduce their price the most before arriving at a final listing price.”

    When the seller knew the buyer, that amount was even lower, coming in at $176,700 (See graph below):

    typica; home sale price fsbo vs agent

    That’s a lot of money to risk losing when you FSBO – far more than what you’d save on commission or other fees. Despite the advantages sellers have in today’s market, it’s still crucial to have the support of an expert to guide you through the process. Real estate professionals are trained negotiators with a ton of housing market insights that average homeowners may never have. An agent’s expertise can alleviate much of the stress of selling your house and help you close the best possible deal when you do.

    Bottom Line

    If you’re ready to sell your house this spring or at any time this year and you’re considering doing so on your own, be sure to think through that decision carefully. Odds are, you stand to gain the most by working with a knowledgeable and experienced real estate agent. Let’s connect to discuss how a trusted advisor can help you, especially in today’s market.

     

    What It Means To Be in a Sellers' Market

    sellers market

    This Season is the Ultimate Seller's Market

    If you’ve given even a casual thought to selling your house in the near future, this is the time to really think seriously about making a move. Here’s why this season is the ultimate sellers’ market and the optimal time to make sure your house is available for buyers who are looking for homes to purchase.

    The latest Existing Home Sales Report from The National Association of Realtors (NAR) shows the inventory of houses for sale is still astonishingly low, sitting at just a 2-month supply at the current sales pace.

    Historically, a 6-month supply is necessary for a normal or ‘neutral’ market in which there are enough homes available for active buyers (See graph below):

    The impact of Monthly housing inventory on home prices

    When the supply of houses for sale is as low as it is right now, it’s much harder for buyers to find homes to purchase. As a result, competition among purchasers rises and more bidding wars take place, making it essential for buyers to submit very attractive offers.

    As this happens, home prices rise and sellers are in the best position to negotiate deals that meet their ideal terms. If you put your house on the market while so few homes are available to buy, it will likely get a lot of attention from hopeful buyers.

    Today, there are many buyers who are ready, willing, and able to purchase a home. Low mortgage rates and a year filled with unique changes have prompted buyers to think differently about where they live – and they’re taking action. The supply of homes for sale is not keeping up with this high demand, making now the optimal time to sell your house.

    Bottom Line

    Home prices are appreciating in today’s sellers’ market. Making your home available over the coming weeks will give you the most exposure to buyers who will actively compete against each other to purchase it.

     

    What Is the #1 Financial Benefit of Homeownership?

    financial benefit of homeownership

    The Financial Benefit of Forming Household Wealth Through Equity

    There are many financial and non-financial benefits of homeownership, and the greatest financial one is wealth creation. Homeownership has always been the first rung on the ladder that leads to forming household wealth. As Freddie Mac explains:

    “Homeownership has cemented its role as part of the American Dream, providing families with a place that is their own and an avenue for building wealth over time. This ‘wealth’ is built, in large part, through the creation of equity…Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”

    Odeta Kushi, Deputy Chief Economist at First American, also notes:

    “The wealth-building power of homeownership shows that home is not only where your heart is, but also where your wealth is…For the majority of households that transition into homeownership, the most recent data reinforces that housing is one of the biggest positive drivers of wealth creation.”

    Last week, CoreLogic released their latest Homeowner Equity Insights Report, which reveals the surge in wealth created over the last twelve months through increased home equity. The report makes five key points:

    1. Roughly 38% of all homes are mortgage-free
    2. The average equity gain of mortgaged homes in the last year was $26,300
    3. The current average equity of mortgaged homes is greater than $200,000
    4. There was a 16.9% increase in total homeowner equity
    5. Total homeowner equity reached over $1.5 trillion

    Here’s a map that shows the equity gains by state:

    equity increasing throughout the country map of the United States

    Increasing equity is giving homeowners the power to better manage the challenges of the pandemic, especially for those spending more time at home. In the report, Frank Nothaft, Chief Economist for CoreLogic, explains:

    “This equity growth has enabled many families to finance home remodeling, such as adding an office or study, further contributing to last year’s record level in home improvement spending.”

    The financial advantage homeowners have has not gone unnoticed. In the same report, Frank Martell, President, and CEO of CoreLogic, states:

    “This growing bank of personal wealth that homeownership affords was noticed by many but in particular for first-time buyers who want a piece of the cake.”

    Increasing wealth benefits more than just homeowners.

    Last year, the Rosen Consulting Group released a report outlining the benefits of homeownership. In that report, they explained what an increase in net worth – which they call the “wealth effect” – means to the economy:

    “In economic literature, the wealth effect is a term used to describe the fact that individuals have a tendency to increase their spending habits when their actual or perceived wealth increases. For homeowners, the latent savings achieved by building equity in their home and the growth in home values over time both contribute to increased net worth. Through the wealth effect, this in turn translates to households having a greater ability and willingness to spend money across a wide range of other types of goods and services that spur business activity and provide a positive multiplier effect that creates jobs and income throughout the economy.”

    Bottom Line

    Homeownership builds wealth through equity, and this creates a positive impact for homeowners and their communities. Let’s connect today if you’re ready to invest in a home of your own.

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