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A Discussion on Rising Home Prices and Your Net Worth

Our run of rising home prices is making homeowners more wealthy.

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Does a rise in home values correlate with a rise in homeowners’ net worth? I’m here to answer that question today.

Appreciation has been strong here in the Twin Cities over the past year. In fact, we’re seeing an 11% increase in home values from this time in 2020. That naturally brings a strong equity position to homeowners, but how does this affect your overall net worth?

The answer is that it’s positively affecting net worth in an amazing way. A recent study showed that this rise in prices has increased the average homeowner’s net worth by $33,000 in just the last year. The National Association of Realtors, along with other industry experts, are anticipating a continuation of strong appreciation in the real estate market over the next five years.

We’re not going to continue to see 11% appreciation every year. Eventually, that will slow down and regress to more normal levels. The key thing to know is that homes are going to continue to appreciate. Five years from now, the net worth of a homeowner is expected to increase by $93,000.

“Industry experts are anticipating a continuation of strong appreciation.”

Homeownership is one of the best ways to build wealth. In fact, when you have appreciation that expands your home equity, you have a unique opportunity to use that equity as a way to upgrade your lifestyle and transform the way you live. There are so many options. If you make that move this year, your net worth will compound at a higher valued property to put you in an even stronger equity position in the future.

If you have any questions about your equity position, home values, or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.

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