People who purchased homes in 2012 have earned a total of $203 billion in home equity, according to a new report from Redfin the technology-powered real estate brokerage. Individually, the typical homeowner who bought the year prices reached their lowest point following the Great Recession has earned $141,000, or 261 percent, in home equity.
The typical home that sold in 2012 has increased $110,000 in value, from a median sale price of $210,000 in 2012 to an estimated value of $320,000 in September 2019. The typical 2012 homebuyer started off with $54,000 in home equity and has $195,000 today.
The report is based on a Redfin analysis of the home equity earned from roughly 1.4 million homes purchased across 138 markets in the U.S. in 2012.
“The opportunity to build wealth through home equity when prices hit their low point was available only to a fortunate subset of Americans who had enough cash for a down payment,” said Daryl Fairweather, Redfin chief economist. “And now many people who weren't able to buy into homeownership during that window of time find themselves on the other side of the housing market coin: Many areas are just plain unaffordable for people who don't have equity built up to trade in for a new home. And those who are waiting in the wings, hoping to buy a home when the next recession hits, probably won't be as lucky as buyers were in 2012. Even if home prices do come down slightly, the housing market won't be impacted nearly as much as it was during the Great Recession and home equity gains won't be nearly as big.”
The massive 12-figure total equity growth is driven by large, expensive coastal markets — mostly in California — where home values have increased by at least two-thirds and the typical homeowner has earned more than $300,000 in equity since 2012. The metros with the biggest total home equity gains in dollars are Los Angeles ($15 billion), Seattle ($8 billion) and Oakland, Calif. ($7.9 billion).
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