Homeowners are gaining equity at the fastest rate since 2013, according to the National Association of Realtors (NAR). These equity gains are powering real estate markets in metro areas across the country and making it possible for homeowners to invest back into their homes or borrow money for other purposes, like education.
Federal Reserve records show that homeowner equity hit a high in 2005, when the total market value of all homes minus homeowners' debt was $13.1 trillion. After the crisis, total national equity plunged as low as $6.4 trillion. However, now the market is well on the way to recovery, with homeowners owning $11.3 trillion in equity in 2014, a 4.9 trillion increase since 2011.
According to NAR, these gains are equivalent to about $63,000 per home. This means that homeowners who bought after the recession are significantly wealthier now than when they first bought their homes, making them less vulnerable to foreclosure. Real estate database RealtyTrac reports that foreclosure starts in May 2015 were below the levels seen in 2005 and 2006, before the crisis was even on the horizon.