As the real estate market continues to evolve, so does home equity. While it can be alarming to hear about negative trends in homeownership, these headlines don’t have to put a damper on your dream of owning property!
With the deluge of news stories, it can be hard to make sense of what’s really going on in an equity story. Let us take you beyond the headlines and put current events into perspective. With a deeper understanding comes better decision-making – that way, you’ll have all the facts at your fingertips when interpreting these big picture movements.
Headlines Focus on Short-Term Equity Numbers and Fail To Convey the Long-Term View
The housing market crash of 2008 caused many homeowners to suffer from being “underwater,” but this situation has since become much less relevant. In 2022, only a fraction of homes purchased are estimated to be underwater, making it easier for new buyers on the block.
Media coverage right now is based loosely on a report from Black Knight, Inc. The actual report from that source says this:
“Of all homes purchased with a mortgage in 2022, 8% are now at least marginally underwater and nearly 40% have less than 10% equity stakes in their home, . . .”
The Black Knight report focused on a specific timeframe to provide valuable insights – 2022. It was an unusual year for the housing market, with home price appreciation reaching its peak in March-April and slowing down ever since then. Now we have important data helping us understand our current real estate situation.
With the market going through its highs and lows, it’s not uncommon for homeowners to be caught in a precarious financial position. Last year saw an unfortunate run of events with buyers entering into agreements at peak prices or spending more than their fair share shortly after – leaving them ever-so-slightly underwater. The media has been negligent in reporting this marginal detail, but thus is life!
Making the decision to buy a home is an important financial choice that should be considered carefully. While some headlines may suggest otherwise, investing in a property is not like gambling at a casino – it’s all about taking the long view and looking further down the road than just tomorrow.
Home ownership can be a great way to build equity quickly but the current market climate means it takes time for homeowners who recently purchased their house to start turning a profit. With that being said, those same people are probably not in any rush to move – making now an opportune moment for buyers looking at entering into this long-term investment.
Always stay in the know! If you’re curious about current real estate trends or want to find out just how much value lies within your home, then look no further. Let’s chat and get all of those answers for you!