Home prices surged to yet another record high in August, rising 18.1% annually, according to the latest report from CoreLogic. This was the largest annual gain in the history of the report and represented a home-price increase of 1.3% from July.
"Home prices continue to escalate at a torrid pace as a broad spectrum of buyers drive demand for a limited supply of homes," CoreLogic President and CEO Frank Martell said. "We expect to see the trend of strong price gains continue indefinitely with large amounts of capital chasing too few assets."
Home prices saw the largest boost in the Pacific Northwest, specifically in metros such as Bend, Oregon, which saw an annual average home price increase of 37.2%, and Twin Falls, Idaho, which saw an increase of 35.8%, the report said.
Homeowners can take advantage of rising home prices by taking out a cash-out refinance on the newfound equity in their homes. Visit Credible to find your personalized rate for a cash-out refinance on your home.
Home prices continue rising
Rising home prices are due to affordability challenges and low housing inventory, as more investors and homebuyers enter the market amid record-low interest rates brought on by the pandemic, according to the CoreLogic Home Price Index (HPI) and HPI Forecast. After COVID-19 and stay-at-home orders shut down the economy, the Federal Reserve cut rates, spurring a boom in home sales in the U.S.
The increasing home prices are also evident when looking at the population that makes up today’s homebuyers. In a recent CoreLogic consumer survey, 59% of homebuyers said they have a household income of at least six figures, compared to 10% of homebuyers who reported earning less than $50,000 per year.
Going forward, economists predict home prices will continue to increase, but the level of price gains will go down. Home price growth is expected to slow to 2.2% annually by August 2022, as the shortage of homes improves and the real estate market slows, according to CoreLogic’s forecast.
Homeowners can tap into their rising equity levels by taking out a cash-out refinance amid today’s low mortgage rates. Visit Credible to compare multiple lenders at once and save money by choosing the mortgage lender with the best interest rate for you.
How homeowners can take advantage of rising home values
As home prices rise across the U.S., there are several ways homeowners can take advantage of their higher home values. Here are a few:
Sell the home
As the demand for homes continues to increase, homeowners could make a high profit by selling their home now. However, the drawback to selling is that homeowners would then face a competitive housing market as they move from being sellers to homebuyers.
Take out a cash-out refinance
Another option to tap into your home's equity is through a cash-out refinance. Homeowners who refinance now could pull money out of their homes to use for home improvement projects or even to consolidate high-interest debt. And with today’s low interest rates, they could even lower their monthly mortgage payments. Visit Credible to compare your options and get the best rate for you.
Invest in housing
For homeowners who are not looking to sell soon, now is a good time to invest in their home to improve its value even further. Those who make home improvements or pay extra money toward their principal mortgage balance will see even higher equity gains in their home which will be beneficial when they are ready to sell or refinance.
If you want to pull cash out of your home or lower your monthly payments by refinancing, contact Credible to speak to a home loan expert and get all of your questions answered.
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at email@example.com and your question might be answered by Credible in our Money Expert column.