Homeowners in Luxury Markets Are Seeing Major Equity Gains
Luxury markets like San Diego have seen record demand throughout the pandemic, and as a result, local homeowners are reporting a collective equity gain of over $3.2 trillion as home values top the charts. Major equity gains are a result of rising prices for single-family homes across the nation, and those in high-end markets are the first to benefit. According to Forbes, CoreLogic’s proprietary Home Price Index reported a 17.7% home price increase for the 12-month period ending in September.
As home values steadily rose, U.S. homeowners with mortgages saw a 31.1% year-over-year increase in home equity during the third quarter of 2021. According to market experts, more gains are likely to come in 2022 as well if prices remain steady.
CoreLogic reports Summer of 2021 saw home price growth reach the highest level in more than 45 years. This moved equity gains to another record high. Of equal importance is those equity gains allowed 70,000 properties around the country to regain equity in Q3 2021. Most notably, "these equity gains provided a crucial barrier against foreclosure for the 1.2 million borrowers who reached the end of forbearance in September," the report states.
"Not only have equity gains helped homeowners more seamlessly transition out of forbearance and avoid a distressed sale, but they've also enabled many to continue building their wealth," said Frank Martell, president and CEO of CoreLogic. "This financial reserve will be especially helpful for homeowners looking to fund renovation projects." CoreLogic's proprietary Home Price Index saw home prices rise 17.7% for the past 12 months ending in September, "spurring record gains in home equity wealth," Martell adds.