Market Update - January 12, 2023
The 2022 Home Price Index report from CoreLogic reported slightly negative readings month to month. However, they still forecast nearly 3% appreciation nationwide over the next year, which could be useful for building wealth. For example, if someone bought a $400,000 home and put 10% down, they would gain $12,000 in appreciation over the next year and earn a 30% return on their investment due to leverage.
What is appreciation? Home appreciation relates to a house or investment property increasing in value over a period of time. A raised value of a property can lead to the owner making a profit upon selling it or earning more income through monthly rent from their tenants.
Increasing home value also leads to more equity in the home. Home equity is the difference between what you owe on your mortgage and what your home is worth. It represents the dollar amount of your home that you actually own, and this money can be accessed and withdrawn through various loans and refinances.
So what does that all mean? It means that homes are still going up in value! That's great news for homeowners heading into 2023.