Northern VA homeowners have reason to be happy! Prices have increased significantly over the last year, which in turn has grown the net worth of homeowners. Home equity appreciation is directly linked – as the value of a persons home increases, so does a their equity. With these recent gains, homeowners are witnessing their financial stability and well-being grow to record levels. Unlike 2008, when homeowner equity was at it’s lowest.

Even more good news for Northern VA homeowners, the recent Home Price Expectations Survey – a survey of a national panel of over one hundred economists, real estate experts, and investment and market strategists – forecasts residential real estate prices will continue appreciating over the next five years, adding to the record amount of equity homeowners have already gained over the past year. Below are the expected year-over-year rates of home price appreciation from the report:

What Does This Mean for Homeowners?

Most understand that home prices are climbing today. What most don’t know is the data in the survey indicates they’ll continue to increase, but at rates that approach a more normal pace. Even still, the amount of household wealth a homeowner stands to create going forward is substantial. This becomes clear when we consider a scenario using a lower-priced property in Northern VA purchased in January of 2021 and the projected rate of appreciation over the next five years. A homeowner of a $350,000 small condo in Northern VA could increase their net worth by a significant amount – over $93,000 dollars by 2026.

Price Appreciation and Home Equity

The quarterly Core Logic report  Homeowner Equity Insights Report, tracks the year-over-year increases in equity. It shows an average annual gain of $33,400 per borrower over the past 12 months accross the nation. In the report, Dr. Frank Nothaft, Chief Economist for CoreLogic, further explains:

“Double-digit home price growth in the past year has bolstered home equity to a record amount. The national CoreLogic Home Price Index recorded an 11.4% rise in the year through March 2021, leading to a $216,000 increase in the average amount of equity held by homeowners with a mortgage.”

The expected, sustained growth of home prices means homeowners in Northern VA can continue to build on the past year’s record levels of home equity – and their financial prosperity. It also presents today’s homeowners with a unique opportunity: using their growing equity for a home upgrade. With so few homes available to purchase and strong buyer demand, there may not be a better time to sell your current house and move into one that better meets your needs.

Bottom Line

Northern VA Home prices are expected to continue appreciating over the next five years , and the associated equity gains are the quickest way homeowners can build household wealth. If you’re a current homeowner who’s ready to take advantage of your built-up equity, let’s connect today to discuss your options.