Photo by David McBee from Pexels & Mediamodifier from Pixabay
Nationwide during the first quarter of 2021 , homeowners with mortgages saw their home equity jump by a staggering 20 % as compared to one year earlier . The dollar amount gains for the first quarter ( January 1st March 31st ) alone for homeowners across the nation amounted to a whopping $ 2 trillion in total homeowner value gains , according to CoreLogic .
The average U . S . homeowner gained $ 26,300 in additional home equity over the past year . According to Experian and CNBC , the average Generation X consumer had $ 32,878 in nonmortgage related debt such as credit cards , student loans , and car loans . When equity growth exceeds debt in just a few months or within one year , this is usually a positive for homeowners .
In California , the average homeowner gained $ 11,000 per month in equity during the first quarter of 2021 ($ 33,000 in three months ) as the average statewide home appreciated 39 % in just 12 months ending in May 2021 to reach $ 818,000 per California home .
In April 2021 , the top three metropolitan regions for yearoveryear home price gains were Phoenix , San Diego , and Seattle . The median sales price for the Southern California region in the same April month reportedly appreciated at a pace of $ 1 every two minutes , according to DQ News / CoreLogic . Each day has 1,440 minutes ( 24 hours x 60 minutes ), so this would be equivalent to a price gain of $ 720 per day and approximately $ 21,600 per month over 30 days .
Declining Home Listings and Rising Demand
Values for products or services usually fluctuate up or down based upon supply and demand . When demand is strong and home listing supplies are low , then home prices rise .
Let ’ s take a look next at some of the primary factors for these suppressed listing supplies and why there ’ s so much demand in spite of an ongoing pandemic designation :
1 . Near record low mortgage rates : Most buyers need mortgages from thirdparty lenders or mortgage brokers . The lower the interest rate , the more affordable that the monthly mortgage payment is for the borrower .
Many younger Generation Z or Millennial buyers or tenants have seen incredibly low mortgage rates for the past 10 years , so they may not remember that mortgage rates in the 2 % to 3 % rate ranges are shockingly low as compared with previous decades .
To better understand how low mortgage rates have become in recent times , let ’ s review the average 30year fixed mortgage rate by decade dating back to the 1980s :
● 12.7 % in the 1980s
● 8.12 % in the 1990s
● 6.29 % in the 2000s
● 4.09 % in the 2010s
● Near 3 % in 2020 and the first half of 2021
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