(But first… Shout out to Bon Jovi for providing the perfect image for our blog post. Who would have thought we’d find a connection between real estate and the New Jersey rockers? We just had to borrow the cover graphic for their releasing-tomorrow album, “This House is Not for Sale,” to illustrate the latest market phenomenon.)
Homeowners certainly appear to be throwing their roots a bit deeper these days, much to the chagrin of would-be buyers. As home prices continue to rise, those already hunkered down appear surprisingly less motivated to list their homes or even withdraw equity through refinancing activity or lines of credit. And the house-rich get house-richer.
According to consumer analytics firm CoreLogic, Americans now have twice the home equity they had five years ago, with an average gain of “housing wealth” near $11,000 over the last year alone.
It wouldn’t be so bad, were it not for the scores of first-time buyers returning to the market. Even those armed with high consumer confidence and decent lender backing are finding slim pickings and prohibitive prices. Demand is outpacing supply even in moderate-growth regions, and half of the nation’s top metropolitan markets report below average housing affordability.
Until a price correction occurs, this means buyers will have to pound more pavement, while existing homeowners make more paper… at least on paper.
