Phoenix has emerged as one of the fastest growing cities for home equity in the US, according to a recent study by home ownership investment company Unison. The city ranked second out of the 50 largest metros in terms of year-over-year median home equity growth. With housing demand far outpacing supply, Phoenix homeowners have enjoyed substantial gains, with median home equity jumping 28.7% or $42,000 in value over the past year. As real estate investment companies look to capitalize on hot markets, Phoenix stands out for its exceptional growth.
Phoenix home values appreciated nearly 30% last year
The Unison study found that 49 out of the 50 largest US metro areas saw double-digit growth in median home equity values over the past year, underscoring the rapid appreciation happening nationally. But Phoenix led the pack with a 28.7% surge. In absolute dollar terms, typical Phoenix homeowners gained $42,000 in new equity. With such massive value creation happening locally, it’s no wonder real estate investment companies are flocking to the Phoenix market.
Housing undersupply and overflowing demand accelerating growth
Behind Phoenix’s equity boom lies a major supply-demand imbalance. Housing inventory stands at just half its normal level, while buyer demand has gone vertical. This mismatch forces many purchasers to pay well above asking prices to land homes. Still, bidding wars and cash offers have become the norm. As long as this housing shortage persists, real estate values seem likely to continue their upward trajectory. That makes Phoenix an appealing market for real estate investors and development firms looking to capitalize on scarcity.
Phoenix home equity growth tops most major metros
Very few major metros can match the home equity growth witnessed in Phoenix last year. The Unison study compared the 50 largest metro areas and found the vast majority saw high single-digit to low double-digit gains. But Phoenix led the pack with its nearly 30% jump. Other top cities for growth included Columbus, OH (26.9%), Cleveland (25.1%) and Virginia Beach (25%). With equity accelerating so rapidly across greater Phoenix, it’s understandable why real estate investment companies would target the region.
Massive wealth creation through housing in Phoenix
The torrid housing market has led to immense wealth creation, especially for Phoenix homeowners. Average homeowners in the metro gained $42,000 in new equity last year alone, the Unison report found. With median home values now around $400,000, that translates to a 10%+ boost in net worth for most owners from appreciation alone. Considering also that mortgage balances fall over time through amortization, the gains are even larger on a net basis. For real estate investors and development firms looking to capitalize, few other markets offer such a compelling growth story as Phoenix has recently.
Phoenix home equity values jumped nearly 30% last year, leading the nation and creating significant wealth locally. With demand continuing to drastically outstrip supply, double-digit annual gains seem likely to persist. That makes Phoenix a standout market for real estate investment companies looking to capitalize on scarcity and accelerating equity growth.