In 2020, the housing market brought benefits to both buyers and sellers. With increased equity and low mortgage rates, homeowners have been able to find some stability and protection when it comes to housing.
Here are some of the benefits homeowners saw in 2020:
Record Level of Home Equity
U.S. homeowners with mortgages have seen their equity increase by a total of $1 trillion from 2019 Q3 to 2020 Q3, according to CoreLogic’s Homeowner Equity Insights Report. That’s a year-over-year increase of 10.8%. In addition, the number of residential homeowners with negative equity decreased by 18.3% year-over-year, to just 3% of all mortgaged properties.
With increased equity, homeowners are in an excellent position, whether they decided to sell or hold on to their homes. Despite the up-and-downs of the economy, the housing market remains strong, providing homeowners peace of mind.
“The average family with a home mortgage loan had $194,000 in home equity in the third quarter,” said Frank Nothaft, Chief Economist for CoreLogic. “This provides an important buffer to protect families if they experience financial difficulties.”
Record Low Mortgage Rates
In 2020, mortgage rates hit a new historic low 15 times. Even as home values increase, low mortgage rates give buyers incredible benefits, further helping the housing market.
Low mortgage rates provide homeowners with numerous options:
- Refinance. Current homeowners who know they will stay in their home for the next several years can refinance to a lower mortgage rate. Keep in mind there are closing costs associated with refinancing, so talk with your mortgage lender to determine if this option is right for you.
- Upsize or Downsize. Homeowners can also take advantage of increased equity and rising property values to sell, using profits to buy a new home.
- Become a Homeowner. Current homeowners aren’t the only ones who are benefiting from the 2020 market. First-time homebuyers can also take advantage of low mortgage rates to buy their first home.
The benefits of the 2020 market are carrying over to 2021. With continued benefits to both buyers and sellers, now is the perfect time to get started with your real estate transaction!