Home ownership is by far the largest source of wealth for most American families. In fact, the median value of a primary residence is worth about 10 times the median value of financial assets held by families. Typically, housing wealth is gained through either price appreciation or the paying off of a mortgage. With recent price increases, homeowners throughout the country have seen significant home equity gains.
How much equity?
On average, homeowners typically stay in their homes for 10 years prior to selling. At the national level, a homeowner who purchased a single-family existing home 10 years ago would have gained $225,000 in home equity if the home were sold at the median sales price of $363,100 in the 3rd quarter of 2021. Over the past 10 years, home prices have increased 7.9% annually. Looking at the past 5 years, home prices have increased by a whopping 8.5% annually. These figures represent a significantly stronger appreciation compared to the 4.2% annual price pace in the past 30 years.
Overall, the significant price gains for homes have outpaced wage gains in 97% of metropolitan areas throughout the country. Typically, home prices need to rise in line with income growth so homes remain affordable and more households are able to realize the benefits of home ownership. In South Florida, we are continuing to see buyers that sold their properties at higher prices in more expensive markets in order to move to The Sunshine State and pay cash for their homes.
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!