Friday, January 3, 2014

For Those Who Held On, Equity Has Returned

 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
NAR research.

 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.

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