As home prices recover, home equity rises.
CNBC reports that home equity wealth has doubled during the last five years to $13 trillion, in large part due to rising home values. In September, home prices registered a 6.3 percent annual gain.
Over the last year, the national average equity growth was $11,000 per homeowner. The results are skewed, though, as Colorado, Utah, and Washington post the biggest gains, while Arkansas, Oklahoma, and Maine see only modest rises (Connecticut and Alaska have experienced price declines).
Homeowners today show more wealth on paper, but they are not extracting it at nearly the rate they did during the last housing boom. Near-record-low mortgage rates have certainly prompted thousands of borrowers to refinance and lower their monthly payments, but a very small share have extracted cash in these refinances and home equity lines of credit (HELOC).
