Home prices surged 11.3 percent this year compared to 2012, the latest
housing data by the National Association of REALTORS® (NAR) shows.
A rise in home prices has pulled more home owners out from underwater
with the return of equity this year, NAR notes.
On NAR's Economists' Outlook blog, researchers explain that a borrower who
bought a median-priced home in 2004 and held it for nine years - the average
tenure in a home - would now have $28,114 in equity (this includes combined
price appreciation and paying down mortgage principle).
A home owner who purchased a median priced home in 2012 would have
more than $23,000 in equity.
Home owners who purchased in 2006 and 2007 - during the peak of the market
- have faced the biggest falls in home prices, but NAR researchers note they
are "nearly in positive equity" territory. A home owner who bought a home in
2006, for example, and owned through 2012 would have been underwater by
about $28,200. However, by this year, that downfall has lessened to $4,700.
Home owners who bought since 2007 are mostly in positive equity, according to
A study released last week by CoreLogic showed that more home
owners were regaining equity. About 13 percent of all homes with a mortgage
remain in negative equity by the end of the third quarter, compared to 14.7
percent who stood in negative equity at the end of the second quarter.