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For homeowners in Colorado and across the country, 2020 was a year of enrichment unrivaled since 2013, when the nation was bouncing back from the housing crash.
U.S. homeowners gained $1.5 trillion in home equity last year, which works out to an average of $26,300 per household, according to a report from real estate analytics firm CoreLogic. Colorado homeowners, reflecting the above-average home prices in the state, did even better, with home equity gains averaging $32,000 last year.
Among the Colorado metros that CoreLogic tracks, Boulder residents enjoyed the biggest home equity gains at $46,673, followed by Colorado Springs residents at $33,284, metro Denver residents at $31,895, Fort Collins residents at $23,934 and Greeley residents at $20,118.
CoreLogic estimates the average home equity amounts homeowners were sitting on at the end of last year were as follows: Boulder, $400,038; Colorado Springs, $188,312; Denver, $258,894; Fort Collins, $230,998; and Greeley, $177,428.
Sharp gains in home prices boosted home equity, and the pandemic was a big driver. Early last spring, the Federal Reserve intervened to stabilize mortgage markets and push down interest rates to historic lows, which boosted affordability and increased demand.
Fearful of catching the virus in a cramped living environment, more multi-family tenants sought out a place of their own. The shift to remote work and school arrangements also fostered a desire for more living space to stretch out, among existing owners and renters alike. And the loss of amenities like concerts and shows also made urban apartment living less attractive.
Congress granted mortgage borrowers struggling to make the monthly payment forbearance, reducing the pressure on them to sell and keeping a source of supply off the market. When supply couldn’t meet the increased demand, prices surged and the inventory of homes available for sale plunged.
“This growing bank of personal wealth that homeownership affords was noticed by many but in particular for first-time buyers who want a piece of the cake. As a result, we may see more of those currently renting start to enter the market in the near future,” said Frank Martell, president and CEO of CoreLogic, in comments accompanying the report.
The equity gains of recent years combined with super-low interest rates also allowed more borrowers to refinance. Some of that money went to fuel a record year for spending on home improvements, which in turn further boosted home values.
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Read More: Colorado homeowners accumulated an average of $32,000 in home equity last year
2021-03-13 13:00:22
