They say that good things happen to those who wait. That’s certainly true for the millions of home owners who struggled through seven years of falling values and false-starting recoveries to see their equity return and resume an upward path.
The latest evidence comes from NAR’s new 2015 Profile of Home Buyer and Sellers just released today. The venerable multi-decade survey reports that sellers realized a median equity gain of $40,000 ($30,100 in 2014) – a 23 percent increase this year following a 17 percent last year over the original purchase price.
Sellers who owned their home for one to seven years all reported roughly selling their homes for $30,000 to $35,000 more than they purchased it. Underlining the price swings during the downturn, equity gains fell to $3,000 for owners who bought between eight and 10 years ago. Homes sold after 21 years reported a price gain of $138,000. Generally, the longer a seller is in the home the greater the increase attributable to price appreciation.
Twelve percent of recent sellers stalled or delayed their home sale because their home was worth less than their mortgage, down from 17 percent in the year prior. Eighty-seven percent were able to sell when they wanted to, indicating a healthy housing market for sellers. Fourteen percent of first time buyers stalled but lived in the home compared to only 11 percent for repeat buyers. Twenty-six percent of those who purchased their home eight to 10 years ago reported stalling or waiting to sell the home.
NAR also reported that increased home prices have lowered the share of home sellers who report they delayed the sale of their home because their home was worth less than their mortgage. That share of sellers dropped from17 percent in the 2014 report to 14 percent in the 2015 report. However, sellers who purchased their home eight to 10 years ago continue to report stalling their home sale at higher rates—29 percent of sellers reported delaying their home sale.