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East Tennessee Real Estate & Neighborhood Source

The Average Homeowner in Tennessee Gained $53,000 in Equity over the Past Year

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When you think of homeownership, what’s the first thing that comes to mind? Chances are you might focus on the non-financial benefits, like the security or stability that a home provides. But what about equity? While it can be overlooked, a homeowner’s equity helps build long-term wealth over time. Here’s a look at what equity is and why it matters.

For a homeowner, your equity is the current value of your home minus what you owe on the loan. So, as home values climb, your home equity does too. That’s exactly what’s happening today. There aren’t enough homes on the market to meet buyer demand, so bidding wars and multiple offers are driving prices up. That’s because people are willing to pay more to buy a home. Right now, this low supply and high demand are giving current homeowners a significant equity boost.

Dr. Frank Nothaft, Chief Economist at CoreLogic, explains it like this:

“Home price growth is the principal driver of home equity creation. The CoreLogic Home Price Index reported home prices were up 17.7% for the past 12 months ending September, spurring the record gains in home equity wealth.”

To find out just how much rising home values have impacted equity, we turn to the latest Homeowner Equity Insights from CoreLogic. According to that report, the average homeowner’s equity has grown by $56,700 over the last 12 months.

The Average Homeowner Gained over $56,700 in Equity over the Past Year | MyKCM

Curious how your Tennessee stacks up? Check out the map above and you’ll see our average is $53,000 in equity gained.

How Rising Equity Impacts You

If you’re already a homeowner in East Tennessee, equity not only builds your wealth, it also opens doors for you to achieve your goals. It works like this: when you sell your house, the equity you built up comes back to you in the sale. You can use those proceeds to fuel your next move, especially if you’ve decided your needs have changed and you’re looking for something new.

If you’re thinking about becoming a homeowner in East Tennessee, understanding the importance of equity can help you realize why homeownership is a worthwhile goal. It builds your wealth and gives you peace of mind that your investment is a wise one, not just from a lifestyle perspective, but from a financial one too.

Bottom Line

Whether you’re a current homeowner in East Tennessee or you’re ready to become one, it’s important to know how equity works and why it matters. If this inspires you to make a move, let’s connect to explore your options and find out what steps you need to take next.

Contact the Troy Stavros TEAM at CornerStone Realty Associates today at 865-999-0925.

4 Ways Knoxville Homeowners Can Use Their Equity

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4 Ways Homeowners Can Use Their Equity | MyKCM

Your equity is a powerful tool that can help you achieve your goals as a homeowner. And chances are, your equity grew substantially over the past year. According to the latest Equity Insights Report from CoreLogic, homeowners gained an average of $51,500 in equity over the past year.

If you’re looking for the best ways to use your growing equity, here are four options:

1. Use Your Equity To Buy a Home That Fits Your Needs

If you’re finding you no longer have the space you need, it might be time to move into a larger home. Or, it’s possible you have too much space and would like something smaller. No matter the situation, consider using your equity to power a move into a home that fits your changing lifestyle. Moving into a larger home in Knoxville can provide extra space for remote work or loved ones. Downsizing, on the other hand, may mean saving time and money by caring for a smaller home.

2. Move to the Location of Your Dreams

If the size of your home in Knoxville isn’t a challenge but your current location is, it could be time to relocate to a new area. Maybe you enjoy vacationing in the mountains, at the beach, or another area, and you’re dreaming of living there year-round. Or perhaps the distance between you and your loved ones is greater than you’d like, and you want to close the gap. No matter what, your home equity can fuel your move to the location where you really want to live.

3. Start a New Business

If you’re not ready to move into a new home in Knoxville, you can use your equity to invest in a new business venture. As the U.S. Small Business Administration Office of Advocacy says:

“There is an estimate of 31.7 million small business owners in the United States, many of them started their business with the equity they had in their home.”

While it’s not recommended that homeowners use their equity for unnecessary spending, leveraging your equity to start a business that you’re passionate about can potentially grow your nest egg further.

4. Fund an Education

Whether you have a loved one preparing to head off to college or you’re planning to go back to school yourself, the thought of paying for higher education can be daunting. In either situation, using a portion of your growing equity can help with those costs, so you can make an investment in someone’s future.

Bottom Line

Your equity can help you achieve your goals. If you’re unsure how much equity you have in your home, let’s connect today so you can start planning your next move.

Contact the Troy Stavros TEAM with CornerStone Realty Associates at 865-999-0925 today!

Knoxville Home Sellers Are in a Sweet Spot [INFOGRAPHIC]

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Sellers Are in a Sweet Spot [INFOGRAPHIC] | MyKCM

Some Highlights

  • In today’s sellers’ market, you’re set up to win big when you list your house in Knoxville.
  • That’s because Knoxville homes are selling fast, receiving 4.4 offers on average and often selling above the asking price. Then, when you buy your next home, you’ll also win by addressing your changing needs and taking advantage of near historic-low mortgage rates.
  • If you’re ready to make a move, let’s connect so you can capitalize on today’s market and find your next dream home. Contact me, Troy Stavros with CornerStone Realty Associates today at 865-999-0925. My team and I look forward to serving you!

Home Price Appreciation and What It Means for Sellers in Knoxville

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A Look at Home Price Appreciation and What It Means for Sellers | MyKCM

When you hear the phrase home price appreciation, what does it mean to you? Through context clues alone, chances are you know it has to do with rising home prices. And as a seller in Knoxville, you know rising home prices are good news for your potential sale. But let’s look past the dollar signs and dive deeper into the concept. To truly understand home price appreciation, you need to know how it works and why it matters to you.

Investopedia defines appreciation like this:

“Appreciation, in general terms, is an increase in the value of an asset over time. The increase can occur for a number of reasons, including increased demand or weakening supply, or as a result of changes in inflation or interest rates. This is the opposite of depreciation, which is a decrease in value over time.”

A Look at Home Price Appreciation and What It Means for Sellers | MyKCM

When we consider this definition and how it applies to real estate, a few words stick out: supply and demand. In today’s Knoxville real estate market, we’re experiencing high buyer demand and very few sellers listing their homes for sale (see maps below): No matter the industry, anytime there’s more demand than supply, prices naturally rise. It happens because buyers are willing to pay more to secure the scarce product or service they’re looking for. That’s exactly what’s happening in today’s Knoxville real estate market. Buyers are competing with one another to purchase a home, leading to bidding wars that drive prices up. For sellers, the rising prices mean that opportunity is knocking.

A Look at Home Price Appreciation and What It Means for Sellers | MyKCM

According to Quicken Loans, the national average home price appreciation rate is between 3-5% in a typical year. Today, home prices are appreciating well beyond the norm thanks to high demand. Here are the latest expert projections on the rate of home price appreciation for this year (see chart below):

Compared to the normal pace of 3-5% appreciation per year, the current average forecast of nearly 11.5% is significant.

A Look at Home Price Appreciation and What It Means for Sellers | MyKCM

For Knoxville home sellers, this means that with the current rise in prices, your house may be worth more than you realize. That price appreciation helps give your equity a boost. Equity is the difference between what you owe on the home and its market value based on factors like price appreciation. It works like this (see chart below): You can use your built-up equity to power a move into your dream home, or you can put it toward life-changing goals like funding an education or opening a business.

But don’t wait. While price appreciation in Knoxville is strong now, those same experts say it’ll start to appreciate at a more normalized pace next year. If you list your house in Knoxville sooner rather than later, you’ll be in a better position to capitalize on the higher-than-average home price appreciation we’re seeing today.

Bottom Line

If you’re thinking of selling your house in Knoxville, there really is no time like the present. Let’s connect so you can get an expert market analysis of your home and its potential. Contact me, Troy Stavros with CornerStone Realty Associates today at 865-999-0925. My team looks forward to serving you!

The Importance of Home Equity in Building Wealth

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Homeownership has always been the first rung on the ladder leading to household wealth. As Freddie Mac recently posted:

“Homeownership has cemented its role as part of the American Dream, providing families with a place that is their own and an avenue for building wealth over time. This ‘wealth’ is built, in large part, through the creation of equity…Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”

Home equity is the difference between the current market value of your home and the amount you currently owe on your mortgage. To estimate your equity, subtract your mortgage balance from the market value of your home.

You can find what you owe on your mortgage by looking at your last monthly statement or by contacting your lender. If you need help determining the current market value of your home, just let us know and we can help!

Is homeownership truly a better path to wealth than renting?

Some argue that renting eliminates the cost of property taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs (property taxes, repairs, insurance, etc.) are already baked into the rent payment – along with a profit margin. You don’t save money by renting.

The Importance of Home Equity in Building Wealth | MyKCM

As proof of this, First American broke down the net worth of homeowners and renters by income categories. Here are their findings: Only one income category ($127-192K) has a higher net worth for renters over homeowners. Every other category shows that being a homeowner leads to greater accumulated wealth.

The Importance of Home Equity in Building Wealth | MyKCM

According to the latest Homeowner Equity Insights Report from CoreLogic, the average homeowner gained $17,000 in equity in just the last year. Here’s a breakdown of the year-over-year equity gain by state:

When can you cash in on your housing wealth?

Your home equity is part of your total wealth as a homeowner. The two most common ways homeowners can leverage their wealth are:

  • Selling
  • Refinancing

Selling: When you decide to sell your home, the equity you’ve built over time will come back to you in the sale. For example, if you paid off your $200,000 mortgage and sold your home for $350,000, you would receive $150,000 after closing. Plus, if you have lived in your home as your primary residence for 2 of the last 5 years, the profit you made on the sale ($150,000) is tax-free!

Refinancing: You can refinance your current mortgage and take out some of the equity you have accumulated. With today’s historically low mortgage rates, you may be able to take out substantial cash and keep your monthly payment the same. Thankfully, homeowners today are doing this responsibly and not repeating the same mistakes made in 2006-2008 when some cashed out their entire equity to purchase luxury items like new cars, lavish vacations, etc.

How can these options help homeowners?

During these difficult times, many households are struggling with their housing expenses. Homeowners, because of their equity, have better alternatives. Odeta Kushi, Deputy Chief Economist at First American, recently explained that homeowners financially impacted by the pandemic will not necessarily be faced with foreclosure:

“The foreclosure process is based on two steps. First, the homeowner suffers an adverse economic shock…leading to the homeowner becoming delinquent on their mortgage. However, delinquency by itself is not enough to send a mortgage into foreclosure. With enough equity, a homeowner has the option of selling their home, or tapping into their equity through a refinance, to help weather the economic shock.”

What might the future bring?

The Importance of Home Equity in Building Wealth | MyKCM

Most experts are calling for home prices to continue appreciating going forward. The Home Price Expectation Survey, a survey of a national panel of over one hundred economists, real estate experts, and investment & market strategists, indicates appreciation will continue for at least the next five years. Using their annual projections, the graph above shows the equity build-up a purchaser would potentially earn by buying a $300,000 home this January:

Bottom Line

Home equity, for most Americans, is the quickest way to build household wealth. That wealth gives homeowners more options during good times and in difficult situations.

Have questions or want to get the process of buying a home started? Call/Text me, Troy Stavros with CornerStone Realty Associates at 865-999-0925 today!

Why Not to Wait Until Spring to Sell Your Home and Make A Move in Knoxville

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The housing market recovery coming into the new year has been nothing short of remarkable. Many experts agree the turnaround from the nation’s economic pause is playing out extremely well for real estate, and the current market conditions are truly making this winter an ideal time to sell and make a move. Here’s a dive into some of the biggest wins for homebuyers this season.

1. Mortgage Rates Are Historically Low

In 2020, mortgage rates hit all-time lows 16 times. Continued low rates have set buyers up for significant long-term gains. In fact, realtor.com notes:

“Given this means homes could cost potentially tens of thousands less over the lifetime of the loan.”

Essentially, it’s less expensive to borrow money for a home loan today than it has been in years past. Although mortgage rates are expected to remain relatively low in 2021, even the slightest increase can make a big difference in your payments over the lifetime of a home loan. So, this is a huge opportunity to capitalize on right now before mortgage rates start to rise.

2. Equity Is Growing

According to John Burns Consulting, 58.7% of homes in the U.S. have at least 60% equity, and 42.1% of all homes in this country are mortgage-free, meaning they’re owned free and clear.

In addition, CoreLogic notes the average equity homeowners gained since last year is $17,000. That’s a tremendous amount of forced savings for Knoxville homeowners, and an opportunity to use this increasing equity to make a move into a home that fits your changing needs this season.

3. Home Prices Are Appreciating

According to leading experts, home prices in Knoxville are forecasted to continue appreciating. Today, many experts are projecting more moderate home price growth than last year, but still moving in an upward direction through 2021.

Knowing home values are increasing while mortgage rates are so low should help you feel confident that buying a home now, before prices rise even higher is a strong long-term investment.

4. There Are Not Enough Homes for Sale

With today’s low inventory of homes on the market in Knoxville, which is contributing to this home price appreciation, sellers are in the driver’s seat. The competition is high among buyers, so homes in Knoxville are selling quickly.

Making a move while so many buyers are looking for homes to purchase may mean your house rises to the top of the buyer pool. Selling your house before more listings come to the market in the traditionally busy spring market might be your best chance to shine.

Bottom Line

If you’re considering making a move, this may be your moment, especially with today’s low mortgage rates and limited inventory. Let’s connect to get you set up for homebuying success in the new year.

Call/Text me, Troy Stavros with CornerStone Realty Associates at 865-999-0925 today with any questions or to get the process started!

Why Not to Wait Until Spring to Make a Move | MyKCM