Texas Homeowners Gaining Wealth in State with Most Home Equity
Austin Homeowners will be happy to hear the news from Corelogic’s equity report. Data published in RealtorMag shows that Texas has the highest number of homes in the U.S. with equity in the first quarter of 2014. In fact, the state boasts 97.7% of homes with positive equity, compared to the national average of 90%. Subsequently, homeowners in Austin have increased wealth from their homeownership, which will continue to grow as home prices increase.
In the RealtorMag report, Frank Nothaft, chief economist for CoreLogic, was quoted “About 90 percent of [all U.S.] homeowners now have housing equity and, as a result, have experienced an increase in wealth, which can spur additional consumption and investment expenditures." One factor in the increasing number of Austin homes showing positive equity is rising home prices spurred by buyers flooding the market with insufficient inventory to accommodate. Escalating home prices then bump up the value of real estate where the economy remains strong. Real estate investors are seeing positive gains, while short-term housing patrons are being left in the lurch.
With the cost of rent now trumping the average monthly mortgage amount, it’s a losing battle for those living in short-term housing with no equity in their homes. Yet it’s a winning situation for investors who continue to build wealth from their properties. And much to the dismay of housing-crisis alarmists, home prices aren’t expected to drop anytime soon. A report by Nancy Sarnoff in the Houston Chronicle details the on-going fortitude of Texas real estate. In the report, she quotes Jim Gaines, a research economist at Texas A&M University’s Real Estate Center. He explains that “as demand stays high and inventory remains low, Texans should expect home price increases to continue.” Continued increases in Austin real estate represents a valuable investment that should be made now rather than losing out on the opportunity to start building wealth sooner rather than later.