We saw some of the biggest spikes in home appreciation over the past year in Arizona. For the Phoenix metro, average prices increased 38.82% according to Zillow, which was the fifth largest in the nation. While the high appreciation rate can be a difficult pill to swallow for some home buyers who sat on the fence, this is great news for existing homeowners.
Rising home prices are causing the gap between equity-rich homes and those considered underwater to widen. What exactly is an equity-rich home? A homeowner whose existing home loan balances equal less than 50% of the estimated market value of their home. In contrast, a home is considered underwater when the loan balances equal more than the estimated market value.
According to Attom Data Solutions LLC, Arizona saw an increase in equity-rich mortgaged homes from 53.2% to 57.6%. This put us in the top 5 for the biggest gains, as well as secured our spot as the state with the fifth highest percentage of equity-rich homes.
So what can be done with all of that equity? Some ideas are paying off other high interest debt, creating an emergency fund or using the funds for home improvements or additions to create even more equity! You can also use equity for a sizeable down payment on a new dream home, rent out your current home and purchase another, or use a portion to buy an investment property.
Want to know what the best option for you is? See an online estimate of what your home is worth here. Contact me here or call/text 480-355-8645 today for a personal consultation! With my experience and insight into the current market, I can help you every step of the way.