Homeowners Gained $28k in Equity This Past Year
As a homeowner, your net worth has likely increased over the past year. While home prices have been rising across Colorado, your equity is building faster than you might think. Home equity is simply the current value of your home minus what you owe on your mortgage.
There are still more buyers than there are available homes for sale, which keeps values elevated. That rise in prices translates directly into increased equity for Colorado homeowners.
Colorado’s Equity Gains: A Closer Look
According to the latest Homeowner Equity Insights from CoreLogic, the average homeowner’s equity has grown by $28,000 in the last year. While this is a national average, the average Colorado homeowner has seen $23,000 in equity gains, with some homeowners seeing even more substantial increases in certain areas.
For instance, popular markets like metro Denver and Colorado Springs have experienced robust price appreciation, potentially leading to higher equity gains. Mountain towns and resort areas, which have seen increased demand since the pandemic, tend to outpace the national average.
Long-Term Homeowners: Your Equity is Even Better
If you purchased your home before the pandemic, your equity gains are likely even more impressive. Realtor.com data shows that home prices increased by 37.5% from May 2019 to May 2024. In Colorado’s most desirable areas, this percentage could be even higher.
As Ralph McLaughlin, Senior Economist at Realtor.com, puts it: “Homeowners have seen extraordinary gains in home equity over the past five years.” This is particularly true in Colorado, where the housing market has remained robust despite national economic fluctuations.
Leveraging Your Equity in Colorado
So, what does this equity growth mean for you as a Colorado homeowner? Here are a few ways you could potentially use your increased equity:
- Fund Home Improvements: Use your equity to make upgrades that could further increase your home’s value in Colorado’s competitive market.
- Pay Off High-Interest Debts: If you have mounting credit card debts or other high-interest debts that keep rising due to inflation, tapping into your equity can bring stability to your monthly budget.
- Invest in a Second Home: With Colorado’s diverse landscape, you could use your equity to invest in a mountain getaway or a rental property in a tourist hotspot.
- Finance Education: Use your equity to fund higher education for yourself or family members.
- Start a Business: Colorado’s entrepreneurial spirit is strong. Your home equity could provide the capital to launch that business you’ve been dreaming about. (Pro tip: If you plan to move within the next few years, talk to your favorite mortgage team for advice on self-employment income as a homebuyer before making the jump!)
- Move Up in the Market: If you’re considering a move, your equity can significantly contribute to the down payment on your next home.
Next Steps for Colorado Homeowners
If you’re curious about your home’s current value and your equity, try out our free Home Valuation. Colorado’s real estate market can vary significantly from one area to another, so local expertise from a trusted real estate agent is also powerful. If you don’t have an agent, we would be happy to connect you with one in your area.
The substantial equity gains over the past year present exciting opportunities for Colorado homeowners. Whether you’re looking to stay put and renovate, or you’re considering a move within Colorado’s beautiful landscape, your increased equity can play a crucial role in achieving your goals.
If you’re considering leveraging your equity for a move or other purposes, let’s talk! Whether it’s a Buy Before You Sell program, a HELOC, HELOAN, or anything in between, we can help you finance your next step.
