More American households becoming equity rich

by | Jun 8, 2021

Nearly 20 million American homeowners share something in common: They are equity rich.

Data from the first quarter of 2021 reveal that about a third of homeowners are seeing substantial increases to their home equity.

As home prices and appreciation continue to rise, the share of homeowners in this position has risen by several percentage points in just one year. In 2020, about 28% of homeowners were considered equity rich.

Despite the pandemic, the real estate market flourished. Low interest rates fueled the real estate expansion. And more than a year later, the real estate market continues to thrive.

Almost everywhere in the country, a majority of homeowners are better off today than they were last year or the year before. With increased equity, homeowners can capitalize the moment through a mortgage refinance, which can lower their monthly bill or increase their financial flexibility.

A refinance mortgage lets borrowers latch onto today’s interest rates, saving them money on finance cost and monthly mortgage payments.

Some homeowners opt for a cash-out refinance. This type of loan allows borrowers to secure extra funds for big purchases or other investments like home renovations or higher education. A cash-out refinance is also a great way to consolidate debt into one easy and predictable payment.

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