While some prospective purchasers may visit an available property during this period, many of them express their intention to postpone their decision until January, according to Sublett.
Crystal Hill, a Keller Williams agent at Chill Homes in North Seattle, mentioned that the recent decrease of half a percentage point in mortgage rates has already enticed certain home buyers to reenter the market.
Hill stated, “I have certainly observed an increase in activity.”
Homeownership is a significant source of wealth for millions of Americans, as their properties have experienced a rise in value over the past year due to increasing home prices.
The properties owned by millions of Americans serve as their primary source of wealth. The positive news is that these assets have increased in value over the past year due to the rise in home prices.
According to a recent analysis by real estate data firm CoreLogic, the average American homeowner witnessed a $20,000 increase, or 6.8%, in their home equity by the end of the third quarter compared to the previous year.
Despite facing challenges such as the highest mortgage rates in two decades, average home prices have surged by approximately 9% this year, as reported by the National Association of Realtors. This surge has contributed to the growth in homeowners’ equity, which represents the difference between a home’s value and the remaining mortgage amount.
Home equity plays a crucial role in building wealth as it allows property owners to access the value of their homes, such as through a home-equity line of credit. Additionally, when homeowners decide to sell their properties, they will receive a higher amount of money after paying off their mortgage.
Selma Hepp, the chief economist at CoreLogic, highlighted the correlation between home price growth and home equity growth, emphasizing the significant growth experienced this year despite other factors affecting the housing market.
According to CoreLogic, while homeowners in most U.S. states experienced an increase in their home equity this year, there were certain regions where property owners faced a decline in their equity.
According to the study, property owners in Texas experienced an average loss of approximately $9,000 in home equity compared to the previous year.
The Austin real estate market experienced a decline in prices during the pandemic, resulting in a decrease in home equity. However, Texas homeowners still maintain a significant average equity of $217,000 per property, according to CoreLogic. On the other hand, New York and Utah witnessed declines in home equity as well, with average losses of $7,525 and $873, respectively. Despite these declines, homeowners in these states still possess substantial average equity of $364,000 and $348,000. Hepp emphasized the importance of home price growth and its impact on the market, particularly in Texas where price declines have been observed this year.
The states with the largest increases in home equity
Meanwhile, Hawaii, California, and Massachusetts, which are known for their expensive real estate, experienced the most significant gains in home equity in 2023.
These states also have some of the highest levels of equity among property owners. For example, the average homeowner in Hawaii has approximately $717,000 in equity, while Californians have an average equity of around $634,000, according to CoreLogic.
Owning a home can lead to greater wealth, as highlighted in a Federal Reserve report. It stated that homeownership allowed 66% of Americans to see their equity grow from $139,100 in 2019 to $201,000 in 2022.
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