Category: Market Insights

With both inflation and interest rates hitting record highs in 2022, all American consumers were affected by the increases — but aspiring homebuyers and current homeowners were especially impacted. For the former, the soaring prices were discouraging developments that forced many of them to put their dreams of homeownership on hold indefinitely, while the latter saw all-time highs in equity that presented opportunities for them to reap the benefits of home appreciation by selling or finally putting renovation plans into motion.

While these factors will continue to play a pretty significant role in 2023, the year will also likely bring the rise of more solutions that help homeowners access funding without the stress of debt. Here’s a look ahead at what we think you can expect.

Homeownership Tenure Will Increase, Allowing Homeowners to Build More Equity

Though first-time buyers may still find themselves priced out of the market as interest stays high, current homeowners who opt to stay put and delay plans to move may have an advantage. While they wait out the rate hikes, they’ll earn more equity in their current home, put a dent in their principal, and experience home price appreciation. This might put them in a more favorable place to buy down the road.

As a byproduct of the reduced incentive to sell, homeowners are more likely to focus on and achieve other financial goals in the meantime, like paying down credit card debt, making much-needed renovations on their homes, or even starting a business.

Demand for Cash-Out Refinances Will Decrease

As inflation and interest rates increase, products like home equity loans and cash-out refinances that have fees, monthly payments, and/or interest attached are becoming increasingly less appealing to homeowners. And as a potential recession looms, homeowners are taking steps to minimize unnecessary spending and reduce their expenses in order to keep debt down in any way they can. We’ll likely see products that involve taking on debt decrease in popularity as a result.

To this end, consumers are expanding their search and considering alternative financing options that may have previously been quite unfamiliar. Among these solutions are home equity investments, which allow homeowners to access their equity without taking on monthly payments or interest. This is especially true when it comes to cash-out refinances, as the primary appeal of this solution is often to secure a better rate during low-interest periods; homeowners won’t want to run the risk of losing their current rate given recent hikes.

Small Business Owners Will Explore New Solutions for Funding

Not only are homeowners feeling the strain of rising interest rates; business owners are as well. While small businesses are booming, and poised to continue growing in 2023, financing products that cater to them — like business loans and credit cards — are rapidly becoming more expensive as a result of skyrocketing rates.

With consumers tightening their spending and potentially patronizing businesses less frequently in the past year or so, business owners will likely be looking for supplemental income to stay up and running during lulls. In addition, small business owners who are also homeowners have another source of start-up funding in the form of their homes. Home equity investments allow already cash-strapped business founders to access funding without the hassle of interest or monthly payments. And with the ability to use the money for whatever they’d like, the possibilities are virtually endless — from equipment or marketing to working capital.

If you’re a homeowner who wants to make the most of your growing equity, take our five-minute quiz to see if a Hometap Investment might make sense for you.

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The above information is for general awareness and education purposes only, and does not pertain specifically to the homeowners insurance needs of those seeking a Hometap Investment. We do our best to make sure that the information in this post is as accurate as possible as of the date it is published, but things change quickly sometimes. Hometap does not endorse or monitor any linked websites. Individual situations differ, so consult your own finance, tax or legal professional to determine what makes sense for you.

South Carolina has a lot to love for homeowners: easy access to the ocean and other natural wonders, historic charm, a lower cost of living than the national average, and a year-round mild climate. Yet, it still faces many of the same challenges as other cities when it comes to rising home values and affordability.

As of April 2022, the average South Carolina home value was $280,637, a 25.9% increase from the same time a year prior. In 2021, the average homeowner in the state gained $48,000 in equity.

The metropolitan Hilton Head area saw its average home price jump 6.9% from March to April 2022, reaching $589,000, and the cities that have seen the highest appreciation in the past 20 years are either islands or located on the coast: Sullivan’s Island, Daufuskie Island, Awendaw, McLellanville, and Kiawah Island.

Just over a quarter of South Carolina homes (27.3%) were built past 2000, while more than half (50.3%) were constructed between 1970 and 1999, presenting the potential need for costly repairs on top of already skyrocketing home prices.

Hindrances, Help for First-Time Homebuyers

While South Carolina has a fairly high homeownership rate of 67.5%, those looking to break into the market as first-time buyers are facing major challenges that are, unfortunately, not unique to residents of the state.

“We all thought as rates started to creep up, that may have a calming effect on the market, but it hasn’t and rates are rising right along with values right now,” Graeme Moore, Realtor with The Moore Company, told News19.

State-sponsored programs like Palmetto Heroes, which helps first responders, teachers, and military members (both active and veterans) purchase their first homes through a $10,000 grant, has provided much-needed assistance to some first-time homebuyers.

“A lot of times, people have the salary to afford the monthly payment of a home but don’t have the down payment assistance to get into that home to begin with,” Chris Winston of SC Housing told News 19. This program “helps them buy their first home with some down payment assistance to help them into that home and also low fixed interest rates.”

Dipping Inventory Amid Growing Demand

Statewide, but especially in the Columbia area, low inventory also remains a problem, with the number of houses listed for sale in Columbia dropping 41.6% between February 2021 and February 2022. In the greater Charleston region, inventory has dipped almost 40% (39.67%) since 2021, making it the city with the 7th-highest decrease of the top 100 U.S. housing markets. And in 2021, the Myrtle Beach area saw a 56% drop in home inventory between June and July.

“The state and federal guidelines basically say that spending less than 30 percent of your take-home pay is affordable,” Chris Winston of the SC State Housing Finance and Development Authority told News 19. “We know across the state there are challenges because there’s a lack of inventory. There just aren’t enough affordable houses, whether that’s apartments or homes.”

What’s more, 63% of moves to or from the state in 2021 were inbound, the third-highest percentage in the country behind Vermont and South Dakota, so the demand isn’t likely to decrease any time soon.

Fortunately, not all areas of the state are experiencing issues. In fact, the city of Spartanburg, where the median home price was $198,250 as of April 2022, recently landed on lists of the best places to work in the country, as well as the most affordable cities in which to live. 

Are you a South Carolina homeowner who wants to make the most of your home’s value? A home equity investment could give you access to your equity with no interest and no monthly payments.

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We do our best to make sure that the information in this post is as accurate as possible as of the date it is published, but things change quickly sometimes. Hometap does not endorse or monitor any linked websites. Individual situations differ, so consult your own finance, tax or legal professional to determine what makes sense for you.

Utah is known for its beautiful natural landscapes, including national parks like Zion, Bryce Canyon, Arches, and Canyonlands, plus skiing trails (thanks to all of the snow it gets every year), the annually anticipated Sundance Film Festival, and plenty of fantastic breweries. But along with this high quality of life comes high prices.

High Homeownership Rates — And Equity

As of January 2022, the average Utah home value stands at $555,263, and the state had the second-highest median price in the Western U.S. as of March, behind Colorado at $574,000.  Regionally, prices are even higher, with single-family homes in Salt Lake County reaching $580,000 in February. In fact, Salt Lake City even ranked among the top five out of 51 metropolitan areas in terms of the biggest year-over-year jumps in median sales prices — a 26% increase from $410,000 to $516,759. This broke the previous all-time record for largest price jump of 20.1% all the way back in 1978.

The city also placed highly on the list of cities where houses sit on the market for the shortest amount of time, at 18 days — along with Omaha, Nebraska. This is compared to other metro areas like Nashville (14 days) and Seattle (17 days). It also ranked number two in terms of population growth between 2020 and 2021. 

Utah has a fairly high homeownership rate of 69.1%, meaning that current owners are at an advantage when it comes to value and equity increases in recent years, and the average Utah homeowner gained $91,000 in equity in 2021. 

“In some parts of our state, we’ve had 30% appreciation,” Dejan Eskic, senior research fellow at the Kem C. Gardner Policy Institute, told KJZZ. Within the last 20 years, the highest appreciating cities are Montezuma Creek, Park City, Moab, Garden City, and Salt Lake City, which represent virtually every region of the state.

However, this growth doesn’t bode as well for first-time buyers.

Aspiring Homeowners Forced to Put Dreams on Hold

“Affordability now is the major issue because the mortgage payments are no longer masked by low rates,” Eskic also told KUTV 2News. “I estimate that approximately 67 percent of Utahans are priced out of the median priced single-family home. Because of this, we see more pressure into entry products like townhomes, pushing up their prices as well.” Prices are expected to continue to rise 10-12% in 2022, and according to local realtors, interest rate hikes and inflation will only make things more difficult for prospective homebuyers. 

A recent analysis by ABC4 News found that currently, the average Utah resident would need to save 10% of their annual income for 10–12 years in order to afford a down payment of 10–15% on a home. What’s more, the average college graduate in the state makes just $39,000 per year, so they would need to save for an even longer period of time.

One one hand, the market is becoming less competitive — but this is because buyers are being priced out of the market, and in most cases, first-time buyers aren’t even being considered.

This is a conundrum, as the first-time buyer contingent in Utah is quite high, relative to the rest of the U.S. 

“[They] are finally getting their life together and moving out of their parents’ basements. And they’re starting families,” Eskic also remarked. “Nationally, we have roughly 33 million people hitting that first-time homebuyer age of 32,” he said. “In Utah as a share of our population, we have an even greater percentage.”

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We do our best to make sure that the information in this post is as accurate as possible as of the date it is published, but things change quickly sometimes. Hometap does not endorse or monitor any linked websites. Individual situations differ, so consult your own finance, tax or legal professional to determine what makes sense for you.

Beyond the glitz and glam of Las Vegas, Nevada has so much to offer potential homebuyers, from the relatively low cost of living — thanks in part to its lack of income tax! — to year-round sunny weather and a thriving economy. Anecdotally, Nevada has been drawing a large number of out-of-state transplants in recent months. For example, at an open house in March, 80% of potential buyers were not residents. However, skyrocketing prices have made it hard to break into the market.

As of April 2022, the typical home value in Nevada sits at $445,515, and the state has seen a 31.1% increase in value in the last year. The cities with the highest home value appreciation in the past 20 years — Genoa, Wells, Battle Mountain, Austin, and Ely — span virtually all regions of the state. As a result, Nevada homeowners have experienced significant increases in equity — with the average homeowner gaining $80,000 in equity in 2021 alone. Well over half of Nevada residents (55.6%) own their homes, but the recent rises in appreciation have presented significant challenges for those looking to buy as they’re frequently priced out due to bidding wars and offers well over asking price. 

While 34% of homes in the state were built in 2000 or later, the majority (55.2%) were built between 1970 and 1999. And like in many cities across the country, inventory is down — with new construction slow to move forward due to widespread supply chain issues that have continued into 2022. 

“You can work with delays — in person or online — but when you can’t get stuff, you can’t get it,” Nat Hodgson, CEO of the Southern Nevada Homebuilders Association, told The Las Vegas Sun. “I feel so bad for the builders. The supply chain problems won’t change a lot this year. It’ll be another long year.”

Nevada Regions See Hot Housing Markets

In certain regions, like Southern Nevada (which includes Las Vegas), the market has been much more competitive than experts originally predicted. In September of 2020, CoreLogic predicted with 70% certainty that home values would fall 7.8% by July of 2021 — but instead, the median price increased 14% after they declared it the riskiest market in America. Home values reached $450,000 as of February 2022 and in March, 82.8% of houses in the area sold within 30 days. A recent report published by the Las Vegas Realtors trade group also found that nearly one third of all home sales in the region in March of 2022 were paid for with cash. It’s not just single-family homes, either: condos and townhomes in the southern portion of the state set a record with a median price of $270,000 in March 2022 — a 39% increase from the same month in 2021. 

In the northern Nevada region, which includes cities like Reno, median prices jumped 29% from January 2021 to the same month in 2022, with the city of Reno reaching $600,000 for the first time ever. For comparison, the median sales price in 2017 was just $300,000.

No End in Sight to Soaring Prices (Yet)

More recently, CoreLogic has also stated that Las Vegas is among the 65% of markets across the U.S.that are “overvalued,” along with major cities such as New York, Miami, Seattle, and Dallas. However, this doesn’t foretell an imminent drop in home values — and in fact, nearly every industry report predicts that values will only continue to go up in the coming year. Still, experts acknowledge that there will eventually be a peak.

“Local home prices can’t keep going up this fast forever,”  said Brandon Roberts, a longtime Nevada realtor. “The increases we’ve been seeing in the last year or so are just not sustainable. It remains to be seen how much higher these prices can go and when we might start to see the market stabilize, as many national experts have been predicting. Either way, I seriously doubt you’ll see home prices more than triple again in a single decade.”

If you’re a Nevada homeowner looking to cash in on your home equity without selling, whether your goal is to pay down debt, buy another property, or fund a business, you can do so with a home equity investment from Hometap. 

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We do our best to make sure that the information in this post is as accurate as possible as of the date it is published, but things change quickly sometimes. Hometap does not endorse or monitor any linked websites. Individual situations differ, so consult your own finance, tax or legal professional to determine what makes sense for you.

With a high homeownership rate of 70% and an overall cost of living that’s less than the national average, it’s no question why many choose to make the Great Lakes State their home. As of November 2021, the average home value in Michigan was $218,419, a 16.7% jump year-over-year. The market here is hot — and has been for a while.

Rising Prices and Dwindling Inventory

According to the S&P CoreLogic Case-Shiller Index, in the metropolitan Detroit area in August 2021, home prices were 144% higher than the lowest values during the Great Recession of 2007–2009.

And like many other areas of the country, the region and state are facing issues of low supply and high demand. In October, on-market listings were down 13% from the same time in 2020. 

“We don’t have enough homes being built, we don’t have enough existing homes,” Jeannette Schneider, president of RE/MAX of Southeastern Michigan, told Click On Detroit. “Until that changes … the rest of this year and even into next year, I don’t see it changing dramatically.”

On the bright side, the market in this area has calmed down ever so slightly since the summertime. “What I have seen is that the frenzy that I saw — buyers were crazy for houses — has cooled a little bit,” Schneider said. “(We’re seeing) five or six offers, not 20 offers.”

Survey Reveals Financial Savviness Among Michigan Homeowners

Current homeowners in the state, though, seem to be in an advantageous position at the moment. According to the results of Hometap’s 2021 Homeowner Survey, a significant amount of Michigan homeowners reported having no debt (31.7% vs. 22.7% nationally). Monthly spending remains fairly low among this group as well, with 90.2% spending less than 15% of their gross monthly income on homeownership costs like repairs, taxes, and insurance.

It’s not surprising, then, that  Michigan also had the lowest percentage of homeowners who felt that they needed to recover financially from the pandemic (31.7% compared to 42.8% nationally). And all of those surveyed in the state who did have debt were somewhat or very aware of how much they owed, with none reporting that they were unsure or didn’t know how much they had. 

The state’s homeowners have a number of financial goals, but the largest ones are practical: growing their retirement savings (43.9%) and paying off credit card debt (41.5%). 

…And Untapped Opportunities, Too

Still, Michigan homeowners reported being less ready for the costs of homeownership overall than those in other states, with 22% of those surveyed feeling not very prepared — or not prepared at all — compared to 16.6% nationally.

Despite this, 61% of those surveyed in Michigan considered their home to be an asset, versus 48% nationally. However, nearly half of respondents from the state (48.8%) don’t know how much equity they have in their home — and of those, 45% said that they didn’t feel that they needed to know in comparison to 30% nationally. 35% answered that they did not know how to calculate it, compared to  the 47.2% national average. 

Of those who said they didn’t see their home as an asset, half reported that it’s because they have simply never considered it as an option through which to access cash. 

While homeowners in Michigan generally recognize the opportunity that their home may present and the majority likely know how to determine how much equity they have, our survey reveals that there’s still a knowledge gap for many when it comes to viewing their homes as a way to fund life expenses and reach their financial goals. 

You can learn more about the state of homeowner finances in our free report, Are Homeownership Costs Hindering Other Financial Goals?

Calculate my home value

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We do our best to make sure that the information in this post is as accurate as possible as of the date it is published, but things change quickly sometimes. Hometap does not endorse or monitor any linked websites. Individual situations differ, so consult your own finance, tax or legal professional to determine what makes sense for you.

With its gorgeous beaches, year-round balmy climate, and plethora of amusement and theme parks, Florida has a little something for every kind of homeowner, and is one of the most popular places to live as a result. The average value of a home in Florida as of November 2021 was $334,882, a 25.4% jump from November 2020. The number of home closings was also up 4.3% year over year for the same time period.

The state’s housing market is expected to continue heating up as we move into the new year, with a predicted price increase of 10.7% in 2022, the highest in the entire country. And of Redfin’s recently-released list of the hottest neighborhoods for 2022, eight are in Florida — including Venice, South Sarasota, Downtown Fort Myers, and Weston. The list was determined by year-over-year growth in listing views, as well as a metric known as the Redfin Compete Score, which considers factors like the amount of homes that sold above their listing price and days on the market. 

While there are several reasons for the growing popularity of these communities, two major drivers are retirement and the rise of remote work. 

“Now that remote work is the norm for many Americans, the most popular neighborhoods are in suburbs with natural beauty and homes that are more affordable than those in major coastal cities like New York and San Francisco,” explained Redfin’s Chief Economist Daryl Fairweather.

Prepared for Homeownership, But Challenged By Ongoing Costs

Our recent survey of 1,000 homeowners across the country found that those in Florida felt the most prepared for the costs of homeownership beyond mortgages (such as repairs, taxes, etc.) when they bought their homes, with 89.5% reporting that they were somewhat or very prepared, compared to 83.4% nationally.

Overall, homeowners in Florida were also among the least negatively impacted financially by the COVID-19 pandemic, with just 37.2% saying that they were, versus 46.5% nationally — putting them just behind Pennsylvania.

Get your free copy of the Homeowner Report to see how insights vary from state to state. 

However, those who were adversely affected by the pandemic have faced substantial challenges. The state also had the highest percentage of homeowners who were forced to suspend their mortgage or go into forbearance (5.8% versus the national average of 3.7%) as well as the highest percentage of those who had to tap into their emergency fund or seek help from family, with 12.8% compared to 8.6% nationally.

Seeking Other Funding Sources Despite Equity Awareness

With recent home value increases, Floridians are well-positioned to leverage their equity to handle expenses — and they know it. Not only are Florida homeowners the most aware of how much equity they have in their homes — 69.8% versus the 57% national average — but 59.3% also see their home as an asset they can take cash out of as needed, compared to 48.4% nationally.

Yet, while they may be savvy about their equity and how to use it, they aren’t acting on this knowledge. At least, not yet. Perhaps a reflection of the previous survey finding that these homeowners are more likely to seek out other sources of financial assistance like their emergency funds or family help first, Florida also has the highest percentage of homeowners who have never applied for or considered applying for a loan/HELOC, refinance, or reverse mortgage (82.6% compared with 73.1% nationally). 

Calculate my home value

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We do our best to make sure that the information in this post is as accurate as possible as of the date it is published, but things change quickly sometimes. Hometap does not endorse or monitor any linked websites. Individual situations differ, so consult your own finance, tax or legal professional to determine what makes sense for you.

With its contrasting landscapes of city, suburbs, and rural areas, the New York real estate market has always been one that’s a bit hard to characterize when it comes to overarching takeaways, but the past two years have revealed some clearer emerging trends. 

Lingering Effects of the Pandemic

City-dwellers who fled to suburban and rural areas in search of more space in the early days of the COVID-19 pandemic drove up demand — and prices — in those regions, a phenomenon that is still evident when looking at the market there.

For example, the Syracuse and greater central New York areas are still experiencing the issue of many prospective buyers and a limited number of homes. “When buyers came into the market, they didn’t have an increase of supply, so the prices just went up,” Chip Hodgkins, real estate agent at Hunt Real Estate, told CNY Central. “We’re having 7, 10, 14, we had 53 offers on one house. I mean you only hear about that in California, not in Syracuse,” he continued.

The Manhattan market is also in the midst of a resurgence, particularly when it comes to luxury properties — in fact, 2021 saw the largest amount of luxury contracts in New York’s history. “Leading up to the pandemic, the high end of the market was the weakest segment of the market. However, since the end of the lockdown, it’s inverted – where the weakest segment of the market is the lower end, entry level,” said Jonathan Miller, president and CEO of real estate appraisal firm Miller Samuel.

The typical value of a New York City home in September 2021 was $728,404, a 5.6% increase year over year, and a figure that’s at least partially reflected in the results of Hometap’s 2021 homeowner survey, which found that 26.7% of New York home values were reported to be more than $500,000. In contrast, just 12.9% of homes fell into this range across the seven states with sufficient data for analysis. However, the largest cohort of New York homeowners surveyed (33.3%) had home values between $100,001 and $249,999, with nearly as many (28.9%) reporting home values of $250,000–$499,999, in line with the national average home price of $374,900.

When it came to the impact of the pandemic, our survey revealed that the state also had the most homeowners who were positively affected (or not affected at all) by the pandemic, at 15.6% versus 10.7% nationally.

Get your copy of the report to see how American homeowners compare across regions, generations and race when it comes to home equity and home costs. 

Dealing With Debt, Rising Homeownership Costs

Yet, despite this, nearly 80% of New York survey respondents are saddled with some sort of debt. Homeowners who reported having mortgage loan debt and credit card debt were nearly neck and neck (51.1% and 48.9%, respectively) with auto loan debt close behind at 35.6%. 

When it comes to homeownership costs, the highest cohort of New York homeowners surveyed (48.9%) reported spending less than 15% of their gross monthly income on their mortgage. Still, more than a quarter (26.7%) reported spending between 16% and 25% per month, suggesting that homeowners in the state are increasingly at risk of becoming house-rich and cash-poor in the future if spending continues to creep up.

New York homeowners also spend the biggest portion of their monthly income on non-mortgage costs like repairs and insurance, with 11.1% spending more than 25% versus the 3.6% of homeowners nationally who spend more than 25%. 

Knowledge of Goals and Debt…but Not Equity

Overall, New York state homeowners surveyed were at least somewhat aware of how much debt they owe, with 62.9% answering that they had a general sense and 37.1% saying that they knew down to the dollar.

They also have a wide variety of financial goals they’d like to achieve in the coming year, but most (46.7%) are prioritizing paying off credit card debt, 40% want to grow their retirement savings, and 31.1% have their sights set on renovating their homes — the highest percentage across states with respect to this goal, and 7% more than the national average. An unusually high proportion of New York state homeowners surveyed (17.8%) are also looking to start or grow their business in the next year compared to the national average of 11.3%.

There’s just one issue: A majority of those surveyed are unaware of how much cash is tied up in their home, which has the potential to help them achieve these goals. New York had the highest percentage of homeowners surveyed — 53% — who didn’t know how much equity they have in their home. Of those who didn’t know, a third reported that they didn’t feel they needed to know. Relatedly, New York had the most homeowners surveyed who didn’t consider their home to be an asset (57.8% versus 51.6% nationally).

Finally, New York represented the largest cohort of homeowners who answered that they didn’t want to sell their homes or take out a loan, and 34.6% of New Yorkers (versus 24.4% nationally) believe that those are the only ways to access their equity. 

You can learn more about the state of homeowner finances in our free report, Are Homeownership Costs Hindering Other Financial Goals? If you own a home in New York and you’re seeking a way to make the most of its value, a Hometap Investment could be a great option. 

Calculate my home value

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We do our best to make sure that the information in this post is as accurate as possible as of the date it is published, but things change quickly sometimes. Hometap does not endorse or monitor any linked websites. Individual situations differ, so consult your own finance, tax or legal professional to determine what makes sense for you.