October 17, 2018

Equity in the West

Homeownership remains a big part of the American Dream, providing families with a place that's their own and the opportunity to create financial stability over time.

Let's Talk: Just how is this financial stability realized and what can be expected?

To determine how much equity you have in your home, subtract what you owe on your mortgage from its current value.

As a homeowner, you'll have the opportunity create financial stability by building up equity over the years – a critical part of homeownership. You'll do this by paying down your mortgage (through your monthly mortgage payment) and your home's appreciation over the years. 

According to a September report by CoreLogic, today's average homeowner gained over $16,000 in equity between the second quarter of 2017 and the second quarter of 2018. Home equity increased in virtually all states, with the West reaping the largest gains.  These numbers are strong, due in large part to today's strong economy.

StateHome Equity Gained

In total, the nation saw an aggregate gain in equity of nearly $1 billion. This gain has nearly doubled over the past five years.

These year-over-year numbers are strong, but it's important to note that some markets appreciate faster than others – such as California and Washington – and there are no guarantees with home price gains.  It's also possible for home values to depreciate due to local area economic conditions that cause a decline in your home's value and/or an increase in mortgage debt.  Today, 4.3% of today's homeowners have negative equity, a 21% decrease over this past year.

Learn more about buying, owning and renting a home at My Home by Freddie Mac®.