Tips from Andrew Shader: The Average Homeowner Gained More than $50,000 of Equity Over the Last Year

The equity of a home is its current value minus what the homeowner owes on the loan for it. Over the past 12 months, the average homeowner in the U.S. has seen their equity skyrocket by $55,300. How did such a huge increase happen? Andrew Shader, a Ft. Lauderdale real estate investor and developer, explains.

The Great Home Equity Gain

The equity that homeowners are building is excellent news for them. Their net worth has gotten an impressive boost. The values of homes are on the uptrend, thanks to the low housing supply and high buyer demand that characterized 2021. The COVID-19 pandemic had much to do with creating that seller’s market.

The number of people selling their homes during the pandemic plummeted, creating a housing shortage. In other words, says Andrew Shader, there weren’t enough houses for sale to meet the demand of people who wanted to buy a home.

Bidding wars drove home prices up, and now homes are worth more in the market today than they were a few years ago. As the value of a homeowner’s property climbs, so, too, does their equity.

The Impact of Rising Home Equity

The equity in a home can help a homeowner in many ways, including by:

• Providing a source of money when selling
• Getting money as part of a home equity loan
• Offering a home equity line of credit

There are many means by which homeowners can tap into the equity of their homes, and it can be a valuable asset to draw on.

Providing a Source of Money when Selling

Many homeowners will one day sell their homes, and when they do, they will want as much equity as possible to come back to them. The equity they have in the home when it sells can be enough to cover much (or all) of the down payment on their next home.

Getting Money as Part of a Home Equity Loan

A home equity loan is one in which the homeowners borrow money and use the equity that has been built up as collateral. It’s a fixed-term loan granted by a bank or other lender and is often referred to as a “second mortgage.”

Offering a Home Equity Line of Credit

Similar to a home equity loan is a home equity line of credit (HELOC). With a HELOC, a bank or lender agrees that they will lend an amount of money as a revolving line of credit to the homeowner. The collateral is the homeowner’s equity in their property.

Home Equity: Changing the Game

Equity can be quite a game-changer, especially when it increases so much so fast. If you’re interested in finding out how much equity you have in your home, reach out to a trusted real estate pro.

Who Is Andrew Shader?

Andrew Shader is a real estate investor and developer in Ft. Lauderdale. With a background in insurance, technology, accounting, and leadership, he founded his real estate business in 2016. He is now an entrepreneur whose success lies in his passion for finding scalability in any vertical with real estate.