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The Average Homeowner Gained $56,700 in Equity over the Past Year

The Average Homeowner Gained over $56,700 in Equity over the Past Year | MyKCM
 

When you think of homeownership, what’s the first thing that comes to mind? Chances are you might focus on the non-financial benefits, like the security or stability a home provides. But what about equity? While it can be overlooked, a homeowner’s equity helps build long-term wealth over time. Here’s a look at what equity is and why it matters.

For a homeowner, your equity is the current value of your home minus what you owe on the loan. So, as home values climb, your equity does too. That’s exactly what’s happening today. There aren’t enough homes on the market to meet buyer demand, so bidding wars and multiple offers are driving prices up. That’s because people are willing to pay more to buy a home. Right now, this low supply and high demand are giving current homeowners a significant equity boost.

Dr. Frank Nothaft, Chief Economist at CoreLogic, explains it like this:

Home price growth is the principal driver of home equity creation. The CoreLogic Home Price Index reported home prices were up 17.7% for the past 12 months ending September, spurring the record gains in home equity wealth.

To find out just how much rising home values have impacted equity, we turn to the latest Homeowner Equity Insights from CoreLogic. According to that report, the average homeowner’s equity has grown by $56,700 over the last 12 months.

Curious how your state stacks up? Check out the map below to find out the average equity gain for your area.The Average Homeowner Gained over $56,700 in Equity over the Past Year | MyKCM

How Rising Equity Impacts You

If you’re already a homeowner, equity not only builds your wealth, it also opens doors for you to achieve your goals. It works like this: when you sell your house, the equity you built up comes back to you in the sale. You can use those proceeds to fuel your next move, especially if you’ve decided your needs have changed and you’re looking for something new.

If you’re thinking about becoming a homeowner, understanding the importance of equity can help you realize why homeownership is a worthwhile goal. It builds your wealth and gives you peace of mind that your investment is a wise one, not just from a lifestyle perspective, but from a financial one too.

Bottom Line

Whether you’re a current homeowner or you’re ready to become one, it’s important to know how equity works and why it matters. If this inspires you to make a move, let’s connect to explore your options and find out what steps you need to take next.

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North of Boston Real Estate Market Update December 2022

Here's a look at the north of Boston real estate market specifically Middlesex and Essex counties and comparing November of 2021 to November of 2020. Overall it remains a strong seller's market even though last November we had low amounts of inventory. If you can believe it, we actually dropped close to 27% compared to last November. Despite less homes on the market, more homes sold, close to about 3% compared to last November.  Days on market are actually down about 10%.  Median sales prices are up close to 10.5%. So what's in store for 2022?  Well experts predict it will remain a strong seller's market. We may not see the appreciation like we did in the past but the market will definitely favor sellers.   Some experts are predicting interest rates may rise up to 4% by the end of 2022 and that may slow down appreciation some. But outside the great recession, as history shows us, home prices still appreciate even with rising interest rates. One reason for that is that rising interest rates are also tied to a healthy economy. For potential home buyers out there our advice is sooner is better than later. Rising interest rates and rising home prices could result in either a smaller house and or a larger monthly payment. For home sellers out there, if you are ready to go to the market but are simply waiting because it's wintertime I would suggest rethinking that plan if you are considering making a move in or out of the suburbs north of Boston give us a call at 617-275-3379.

 

Curious about the numbers for your area?  Click the link for your town!

AndoverNorth AndoverNorth ReadingReadingStoneham and Wakefield

Be sure to like us on Facebook and follow us on Instagram for a behind the scenes of our day to day and favorite happenings north of Boston!

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    Community Spotlight and Giveaway with Mak&Co.

    We recently visited the furniture store Mak&Co. in downtown Andover and it was so beautiful inside we didn't want to leave!  Mak&Co. not only carries furniture but also offers design services for small or large projects.  Their design services range from complimentary room layouts & measuring to full scale interior design services.  They also have beautiful lighting, rugs, home accessories, holiday and seasonal decor.

    Check out the video and be sure to check out our Facebook and Instagram pages for a chance to win a $100 gift certificate to Mak&Co.

     

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    Why It Just Became Much Easier To Buy a Home

    Why It Just Became Much Easier To Buy a Home | MyKCM
     

    Since the pandemic began, Americans have reevaluated the meaning of the word home. That’s led some renters to realize the many benefits of homeownership, including the feelings of security and stability and the financial benefits that come with rising home equity. At the same time, many current homeowners have decided their house no longer meets their needs, so they moved into homes with more space inside and out, including a home office for remote work.

    However, not every purchaser has been able to fulfill their desire for a new home. Here are two obstacles some homebuyers are facing:

    • The ability to save for a down payment
    • The ability to qualify for a mortgage at the current lending standards

    This past week, both of those challenges have been mitigated to some degree for many purchasers. The FHFA (which handles mortgages by Freddie Mac, Fannie Mae, and the Federal Housing Administration) is raising its loan limit for prospective purchasers in 2022. The term used to describe the maximum loan amount they will entertain is the Conforming Loan Limit.

    What Is the Difference Between a Conforming Loan and a Non-Conforming Loan?

    Investopedia explains the difference in a recent post:

    “Conforming loans are the only loans that meet the requirements to be acquired by Fannie Mae and Freddie Mac. Jumbo loans, which exceed the conforming limit, are the most common type of nonconforming loan.”

    What Difference Does It Make to Me as a Home Buyer?

    A Forbes article earlier this year explains the benefits of a conforming loan and why they exist:

    “Since lenders can’t sell non-conforming loans to Fannie Mae or Freddie Mac to free up their cash, they’re a bit riskier for the lender. This is especially true for jumbo loans, which aren’t backed by any government guarantees. If you default on a jumbo loan, it’s a huge blow to the lender.

    Thus, lenders generally charge higher interest rates to compensate, and they can have even more requirements. For example, lenders who give out jumbo loans often require that you make a down payment of at least 20% and show that you have at least six months’ worth of cash in reserve, if not more.”

    What Happened Last Week?

    The FHFA has significantly increased its Conforming Loan Limits for 2022. Sandra L. Thompson, FHFA Acting Director, explains in the press release that:

    “Compared to previous years, the 2022 Conforming Loan Limits represent a significant increase due to the historic house price appreciation over the last year. While 95 percent of U.S. counties will be subject to the new baseline limit of $647,200, approximately 100 counties will have conforming loan limits approaching $1 million.”

    This means that more homes now qualify for a conforming loan with lower down payment requirements and easier lending standards – the two challenges holding many buyers back over the last year.

    The Federal Housing Administration (FHA) also increased its Conforming Loan Limits for 2022. That could also mean an easier path to homeownership for many prospective buyers. As the Forbes article explains:

    “FHA loans can be very beneficial if you don’t have as much savings, or if your credit score could use some work.”

    Bottom Line

    Buying your first or your next home may have just gotten much easier (less stringent qualifying standards) and less expensive (possibly lower mortgage rate). Let’s connect to discuss how these changes may impact you.

    Resources:
    1. To get more information on the new FHFA Conforming Loan Limits, click here.
    2. To get more information on the new FHA Conforming Loan Limits, click here.

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    Home Is Where the Heart Is More than Ever This Year

    Home Is Where the Heart Is More than Ever This Year | MyKCM
     

    There’s no denying the financial benefits of homeownership, but what’s often overlooked are the feelings of gratitude, security, pride, and comfort we get from owning a home. This year, those emotions are stronger than ever. We’ve lived through a time that has truly changed our needs and who we are, and as a result, homeownership has a whole new meaning for many of us.

    According to the 2021 State of the American Homeowner report by Unison:

    “Last year, staying home became a necessity and that caused many homeowners to have renewed gratitude for the roof over their head.”

    As a nation, we continue to work through the challenges of a pandemic that’s pushed us all to new limits. Over the past year and a half, we’ve spent more time than ever at home: working, eating, schooling, exercising, and more. The world around us changed almost overnight, and our homes were redefined. Our needs shifted, and our shelters became a place that protected us on a whole new level. The same study from Unison notes:

    • 91% of homeowners say they feel secure, stable, or successful owning a home
    • 64% of American homeowners say living through a pandemic has made their home more important to them than ever
    • 83% of homeowners say their home has kept them safe during the COVID-19 pandemic

    It’s no surprise this study also reveals that homeowners are now more emotionally attached to their homes as well:Home Is Where the Heart Is More than Ever This Year | MyKCM

    As we’ve learned throughout this health crisis, homeownership can provide the safety and security we crave in a time of uncertainty. That sense of connection and emotional stability genuinely reaches beyond just the financial aspect of owning a home. As JD Esajian, President of CT Homes, LLC, says:

    “Aside from the financial factors, there are several social benefits of homeownership and stable housing to consider. It has long been thought that buying a home contributes to a sense of accomplishment. Still, most individuals fail to realize that homeownership can benefit your mental health and the community around you.”

    Whether you’re thinking of buying your first home, moving up to your dream home, or downsizing to something that better fits your changing lifestyle, take a moment to reflect on what Mark Fleming, Chief Economist at First American, notes:

    “Buying a home is not just a financial decision. It's also a lifestyle decision.”

    Bottom Line

    If you’re considering buying a home, it’s not entirely about the dollars and cents. Don’t forget to weigh the non-financial benefits that may truly change your life when you need them most.

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      For Sale! 40 Brentwood Circle North Andover, MA 01845

      40 Brentwood Circle | North Andover, MA | 01845

      Overlooking one of North Andover's most sought after locations, 40 Brentwood Circle sits high on a corner lot with beautiful views of its surrounding neighborhood. This center entrance garrison colonial has been renovated to include both cosmetic & important system updates. At the heart of the home, the kitchen boasts quartz counters and new slate appliances. The kitchen is completely open to the dining area for seamless entertaining & overlooks the fireplaced family room for a layout that's ideal for everyday living. Overlooking the flat backyard, the 3 season sunroom provides a serene place for morning coffee, or an evening gathering spot with friends without worry of bugs or the elements. Renovated, full bathrooms on every living level & the finished basement provides plenty of space for an additional TV room, playroom or exercise space. Located by the NA Country Club, Brooks School, apple picking & activates at Smolak Farm, hiking at Weir hill & convenient to Rt 495,114 & 125.

      Click here for more details and Open House info!

       

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        North of Boston Real Estate Market Update November 2021

        Welcome to our monthly market update for the north of Boston Real Estate Market! We're comparing October of 2021 to October of 2020 specifically Middlesex and Essex counties . The market has changed since last spring. However, this fall market still has remained a strong seller's market. Overall total number of homes sold went down about 15.5%. However inventory levels that also went down about 19%. Days on market the time is taking homes to sell, that went down close to 19%. Medium home prices  went up close to 11% since last October. While many potential home sellers overlook the winter season we think this could still be a great time to take advantage of high prices and high demand. For home buyers out there this isn't the time to put your search on pause as interest rates are projected to rise in 2022. If you are considering a move in or out of the suburbs north of Boston give us a call at 617-275-3379.

        Curious about the numbers for your area?  Click the link for your town!

        AndoverNorth Andover, North ReadingReadingWakefield and Stoneham

        Be sure to like us on Facebook and follow us on Instagram for a behind the scenes of our day to day and favorite happenings north of Boston!

        Sellers Have Incredible Leverage in Today's Market

        Sellers Have Incredible Leverage in Todays Market | MyKCM
         

        With mortgage rates climbing above 3% for the first time in months, serious buyers are more motivated than ever to find a home before the end of the year. Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), puts it best, saying:

        "Housing demand remains strong as buyers likely want to secure a home before mortgage rates increase even further next year."

        But the sense of urgency they feel is complicated by the lack of homes for sale in today’s market. According to the latest Existing Home Sales Reportfrom NAR:

        “From one year ago, the inventory of unsold homes decreased 13%. . . .”

        What Does This Mean for Sellers Today?

        With buyers eager to purchase but so few homes available, sellers who list their houses this fall have a tremendous advantage – also known as leverage – when negotiating with buyers. That’s because, in today’s market, buyers want three things:

        • To be the winning bid on their dream home.
        • To buy before rates rise
        • To buy before prices go even higher.

        Your Leverage Can Help You Negotiate Your Best Terms

        These three buyer needs give homeowners a leg up when selling their house. You might already realize this leverage enables you to sell at a good price, but it also means you can negotiate the best terms to suit your needs.

        And since buyer demand is still high, there’s a good chance you’ll get offers from multiple buyers who are willing to compete for your house. When you do, look closely at the terms of each offer to find out which one has the best perks for you.

        If you have questions about what’s best for your situation, your trusted real estate advisor can help. They have the expertise and are skilled negotiators in all stages of the sales process.

        Bottom Line

        Today’s buyers are motivated to purchase a home this year, and that’s great news if you’re thinking of selling. Let’s connect today to discuss how much leverage you have as a seller in today’s market.

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        For Sale! 33 Bay State Road, Wakefield, MA 01880

        Welcome to 33 Bay State Road in Wakefield!  This Cape Cod style home is both updated and spacious! The first floor consists of a front to back living room, granite and stainless kitchen and a dining room ready for the holidays! The sitting room offer flexible space for a play room or a spot for home work. All 3 bedrooms are upstairs along with a renovated bathroom. The 4th bedroom is 9x8 and offers space for a nursery or home office. Finished basement offers fun space for games and play. Hardwood floors throughout! The 2 car garage offers both comfort and convenience in the upcoming winter! Flat, fenced in yard with storage shed and concrete patio for outdoor BBQ's! Convenient location by Rt 95 for an easy commute and down the street from all the activities at Lake Quanapowitt!

        Click here for more pictures and open house details!

         

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        For Sale 1 Sparhawk Circle in Stoneham, MA 02180

        If location is high on your priority list, you are not going to want to miss out on 1 Sparhawk Circle in Stoneham! This sun-filled, split entry home has been meticulously maintained & situated with extra space on a corner lot, in one of Stoneham's most coveted areas. The first level features gleaming hardwood floors & an eat-in kitchen with stainless steel appliances & granite counter tops. Off the kitchen & dinning area, the spacious deck offers great space for summer grilling & dinners al fresco. Downstairs offers possibilities with a wet bar, family room, gas fireplace, office space & full bath. Convenient 1 car garage, gas heat & refreshing central air! Outside the yard is flat, perfect for gardening, games & play! The Colonial Park neighborhood is sought after by many with its intertwining sidewalks & streets, close proximity to Colonial Park Elementary, Stoneham High School, walking trails at Whip hill, restaurants in both Stoneham & Melrose, the commuter rail & easy access to many highways!

        Click here for more photos and open house details!

         

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