"Owning a home is considered one of the best and most financially savvy a person can make-if you can afford it. After all, it's the largest asset class in the largest financial market in the world, and the 30-year mortgage is a unique American invention that (theoretically) invites everyone into the American Dream of homeownership. Buying a house allows people to build equity and wealth over time by making mortgage payments that reduce the loan principal and increase the owner's stake in the home."
"But since the Federal Reserve hiked interest rates aggressively in 2023, home-price appreciation has been either broadly flat or falling across the U.S., the average American homeowner lost approximately $9,200 in equity during the past year, according to data from information services company Cotality (formerly CoreLogic). "Home equity growth has shifted from a period of explosive gains in the years surrounding 2022, into a plateau," Leo Pond, a real-estate advisor with Four Seasons Sotheby's International Realty, told Fortune."
Owning a home builds equity and long-term wealth through mortgage payments that reduce principal and increase ownership. Home prices surged during the pandemic, producing large gains for homeowners. Since aggressive Federal Reserve rate hikes in 2023, home-price appreciation has been flat or declining, and the average American homeowner lost about $9,200 in equity over the past year. Home equity growth has shifted from explosive gains around 2022 into a plateau driven by slowing appreciation, elevated borrowing costs, and supply imbalances. Despite recent losses, the average homeowner still holds roughly $307,000 in accumulated equity.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]