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Will home equity levels increase again this spring? What experts say
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Home equity levels have been on the upswing for quite a while. In fact, mortgaged homeowners have seen their home equity jump by more than 8% in just the last year alone, according to data provider CoreLogic.
That uptick in home equity levels largely comes down to a low supply of houses for sale and continued demand from buyers. This drives up prices and home values — and, subsequently, owners’ equity stakes as well. In turn, the average homeowner currently has nearly $300,000 in home equity.
That equity can be a valuable thing. It means more profits when you sell and, while you’re in the home, you can borrow from it using tools like home equity lines of credit (HELOCs) and home equity loans. And, the home equity and HELOC interest rates are often lower than the alternatives, making them a smart borrowing option for many homeowners.
Still, home equity isn’t set in stone, and as the market changes, home values and equity levels can, too. Here’s what could happen with home equity levels this spring, according to experts.
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Will home equity levels increase again this spring? What experts say
Are you considering using your home equity soon? Experts say home equity levels should continue to increase, and one reason for that is the simple law of supply and demand.
The U.S. housing market has been short of supply for years — an issue that started when the 2008 housing crash caused homebuilders to pull back significantly. In fact, the country is currently about 3.2 million homes short of demand, according to one analysis.
“The driving trend is too much demand and not enough supply,” says Neil Christiansen, branch manager at Churchill Mortgage. “Until more homes are built and existing homeowners give up their ultra-low interest rate and put their home on the market, home appreciation should continue to see healthy gains throughout 2024 and beyond.”
But while those high interest rates have deterred some homebuyers, there has still been healthy demand in recent months. More than 4 million homes were sold in March alone, according to the National Association of Realtors. And, Fannie Mae predicts home sales to increase 4.2% this year.
“I expect a modest gain in equity this spring,” says Blake Blahut, a broker associate with Realty One Group Inspiration. “Instead of the several percentage points that many homeowners have enjoyed in recent years, I believe it might be more in the 1 to 2% range. While rates are high and the buyer pool is a little smaller, inventory remains relatively low, causing equity growth for most homeowners.”
Find out the top home equity borrowing rates you could qualify for here.
Interest rates are holding back sellers
High interest rates also play another role in propping up equity levels — this time, on the selling end.
“Many existing homeowners are deterred from trading up or downsizing because current mortgage rates have just about doubled for most of them,” says Christopher Gulotta, a clinical assistant professor at NYU’s Schack Institute of Real Estate.
This, combined with rising home prices, essentially incentivizes homeowners from listing their properties, Gulotta says, only increasing the supply shortage.
Home prices are rising — and will continue to
Finally, home prices have been rising for many years — and that’s not expected to change any time soon. According to the Federal Housing Finance Agency’s House Price Index, home prices were up 7% between February 2023 and February 2024. Fannie Mae’s forecast projects about a 5% increase in prices across the year.
“There is no indication that we would see a slowdown anytime soon,” says Michael Micheletti, chief communications officer at home equity sharing company Unlock. “Since equity is directly related to home prices and values, this means homeowners’ equity is still increasing.”
The bottom line
You don’t have to wait around for home values to rise if you want more equity. Improving your house can help (as long as they’re projects that increase your home’s value), as can making extra payments on your mortgage loan.
“The easiest way to improve your home equity position is to apply additional principal to the monthly mortgage payment,” Christiansen says. “This decreases the loan balance and increases the overall equity balance in your favor.”
And if you do opt to use your home equity with a HELOC or home equity loan, make sure to shop around. Rates, terms, and fees can vary widely from one lender to the next.
NEW YORK — Former New York Gov. David Paterson and his stepson were attacked in New York City on Friday night, authorities said.
The incident occurred just before 9 p.m. on Second Avenue near East 96th Street on the Upper East Side, according to the New York City Police Department.
Police said officers were sent to the scene after an assault was reported. When officers arrived, police say they found a 20-year-old man suffering from facial injuries and a 70-year-old man who had head pain. Both victims were taken to a local hospital in stable condition.
In a statement, a spokesperson for the former governor said the two were attacked while “taking a walk around the block near their home by some individuals that had a previous interaction with his stepson.”
The spokesperson said that they were injured “but were able to fight off their attackers.”
Both were taken to Cornell Hospital “as a precaution,” he added.
Police said no arrests have been made and the investigation is ongoing.
The 70-year-old Paterson, a Democrat, served as governor from 2008 to 2010, stepping into the post after the resignation of Eliot Spitzer following his prostitution scandal. He made history at the time as the state’s first-ever Black and legally blind governor.
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A 17-year-old boy was critically injured and a person is in custody after a gunman opened fire on a SEPTA bus in North Philadelphia Friday evening, police said.
At around 6:15 p.m., Philadelphia police were notified about a shooting on a SEPTA bus traveling on Allegheny Avenue near 3rd and 4th streets in North Philadelphia, Inspector D F Pace told CBS News Philadelphia.
There were an estimated 30 people on the bus at the time of the shooting, Pace said, but only the 17-year-old boy was believed to have been shot. Investigators said they believe it was a targeted attack on the teenager and that he was shot in the back of the bus at close range.
According to Pace, the SEPTA bus driver alerted a control center about the shooting, which then relayed the message to Philadelphia police, who responded to the scene shortly.
Officers arrived at the scene and found at least one spent shell casing and blood on the bus, but no shooting victim, Pace said. Investigators later discovered the 17-year-old had been taken to Temple University Hospital where he is said to be in critical condition, according to police.
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Through their preliminary investigation, police learned those involved in the SEPTA shooting may have fled in a silver-colored Kia.
Authorities then found a car matching the description of the Kia speeding in the area and a pursuit began, Pace said. Police got help from a PPD helicopter as they followed the Kia, which ended up crashing at 5th and Greenwood streets in East Mount Airy. Pace said the Kia crashed into a parked car.
The driver of the crashed car ran away but police were still able to take them into custody, Pace said.
Investigators believe there was a second person involved in the shooting who ran from the car before it crashed. Police said they believe this person escaped near Allegheny Avenue and 4th Street, leaving a coat behind.
According to Pace, police also found a gun and a group of spent shell casings believed to be involved in the shooting in the same area.
“It’s very possible that there may have been a shooting inside the bus and also shots fired from outside of the bus toward the bus,” Pace said, “We’re still trying to piece all that together at this time.”
This is an active investigation and police are reviewing surveillance footage from the SEPTA bus.