If you own equity in your home, you have many reasons to be happy, but the most recent one comes from a report concerning the earnings of Home equity in the first quarter  of 2015.

Statistics revealed that home equity rose to $11.7 trillion. Whereas this is not a sky-rocket, it is “the highest since 2007, according to a Federal Reserve report released Thursday in Washington.”

 

What’s In Your Wallet?  Your Net Worth!

No one would keep their net worth in their wallet, but, like the advertiser that used this slogan, we use it as a metaphor. When your equity is valuable, then your metaphoric wallet is fatter with more net worth.

Equity based specifically in real estate mandated almost 14% of an American  household’s net worth as of April of this year.  Palm State wants you to know that this figure represents the biggest income percentage share on record since 2008.

By definition, home equity is “The value of ownership built up in a home or property that represents the current market value of the house less any remaining mortgage payments.”  As you might imagine,  in a healthy economy, “this value is built up over time as the property owner pays off the mortgage and the market value of the property appreciates.”

What is good news for the seller does not always seem to be good news for the buyer, but a healthy buyer vs. seller balance is great news for the economy as a whole.  In the past three years Palm State has seen a steady rise in home prices.The hour glass shows too much sand being funneled into the sand castle home. It symbolizes money.

It is this significant surge that is assisting average Americans as they struggle to re-build their financial wealth following the real estate crash. We love statistics at Palm State Mortgage, so we can not resist telling you that the housing disaster tore $5 trillion out of the heart of many family budgets. This $5 trillion dollar seeming dull, dry statistic represents the grocery money, the gas-to-get-work money, the mortgage payment money, the financial basics of real living families, and it was destroyed.

Many families saw their net worth completely compromised almost overnight.

Statistics That Shape The Future

This is why Palm State Mortgage is proud of the 14% quoted above.  We enjoyed the 20% that was the norm from 2001 to 2006, but a 14% growth is nice and normal compared to bleak and destoyed.

Christopher Low, chief economist at financial-products provider FTN Financial, stated,  “Even though it’s rising, families already have lost a decade of savings.”

Recently, the National Association of Realtors published some figures that can illuminate our understanding of economic recovery, and the give and take between buyers and sellers.  At Palm State Mortgage, we see numbers on a page as living, breathing families, not dry statistics.

Fact Number 1:  “The median home price has surged 42% since the start of the recovery.”

Do The Math:  This means the median cost of a home as of April 2015 is $219,400. Statistics might seem dry, but you can not help but feel a little thrilled when you realize that the same house was at the 10-year low of $154,600 in January of 2012. according to the National Association of Realtors.

(Keep in mind again that home equity is the value of real estate minus mortgages.)

ThinkstockPhotos-140304507Fact Number 2:  Not only good equity, but Home prices are being helped by the strength of the labor market.

Do The Math: About 280,000 jobs were created in May, the most in five months, the Commerce Department said last week.

Fact Number 3:  It is a rising demand for workers that is pushing incomes higher.

Do The Math:  The median annual household income was $54,578 in April of this year, and that is  about 0.6% higher than the previous month, according to Sentier Research.

At Palm State Mortgage, we are proud to see many more clients who are understanding the value of equity in a home. Recovery has really begun, and people are daring to invest in the dream of home ownership again.