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One of the Top Reasons to Own a Home

One of the Top Reasons to Own a Home

One of the Top Reasons to Own a Home | MyKCM

One of the benefits of homeownership is that it is a “forced savings plan.” Here’s how it works: You make a mortgage payment each month. Part of that payment is applied to the principal balance of your mortgage. Each month you owe less on the home. The difference between the value of the home and what you owe is called equity.

If your home has appreciated since the time you purchased it, that increase in value also raises your equity. Over time, the equity in your home could be substantial. Recently, CoreLogic revealed that the average homeowner gained more than $65,000 in equity over the last 5 years.

Unlike last decade, homeowners are no longer foolishly tapping into that equity. In 2006-2008, many owners used their homes like an ATM by pulling equity out to purchase new cars, jet skis, or lavish vacations. They were pulling out cash (equity) from an appreciating asset, and then spending it on rapidly depreciating items. That is not happening anymore.

Over 50% of Homes Have at Least 50% Equity

The number of homeowners that currently have at least 50% equity in their home is astonishing. According to the Urban Institute, 37.1% of all homes in the country are mortgage-free. In a home equity studyATTOM Data Solutions revealed that of the 62.9% of homes with a mortgage, 25.6% have at least 50% equity. That number has been increasing over the last five years.

One of the Top Reasons to Own a Home | MyKCM

By doing a little math, we can see that 53.2% of all homes in this country have at least 50% equity right now. Of all homes, 37.1% are mortgage-free and an additional 16.1% with a mortgage have at least 50% equity.

Bottom Line

Homeownership is different than renting. When you own, your housing expense (the mortgage payment) comes back to you in the form of equity in your home. That doesn’t happen with your rent payment. Your rent helps build your landlord’s equity instead. 


Barbara Michaluk / Weichert Realtors

BarbaraSellsMDhomes.com

 

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Barbara Michaluk, Realtor

Phone 240-506-2434

Email: michaluk@verizon.net  /  Web: BarbaraSellsMDhomes.com

Authorized Leisure World Specialist / Senior Real Estate Specialist /
Internet Marketing Specialist / Certified E-Pro / Certified Staging Agent

Weichert Realtors / 3816 International Dr / Silver Spring, MD 20906

Authorized Leisure World Specialist     Barbara Michaluk Graduate Internet Marketing Specialist Barbara Michaluk Senior Real Estate Specialist   

Comment balloon 3 commentsBarbara Michaluk • September 19 2019 07:08PM

Comments

Great post and topic. It is good to see the change in the way individuals view home equity. Thanks for sharing, I hope you have a great afternoon.

Posted by Pat Champion, Call the "CHAMPION" for all your real estate needs (Coldwell Banker Camelot Realty) about 2 months ago

Good morning, Barbara Michaluk owning a home is a long term investment and the return is the best one could ask for.... keep the property in great shape and updated and the homeowner will make a score....

Posted by Barbara Todaro, Marketing Agent for The Todaro Team (RE/MAX Executive Realty ) about 2 months ago

Thank you Pat Champion and Barbara Todaro. I hope you have a productive weekend in real estate.

Posted by Barbara Michaluk, Top Producing / Full Service REALTOR in Marylan (Weichert Realtors | Silver Spring, MD Phone Direct 240-506-2434) about 2 months ago

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