As home-sale prices rise, so does the net equity holdings of homeowners — and, boy, has it grown in recent months.
Since 2011, the net home equity holdings of Americans rose by $1.7 trillion. But $500 billion of that growth occurred in just the past three months alone.
To give you an idea how important that is to the economy, let’s say that various homeowners borrow 10 percent against that last $500 billion over the course of the next year. That’s $50 billion pumping through the economy — and much of it through the home-remodeling industry in particular — that wasn’t there before. In turn, that means more architects, designers, contractors, carpenters, electricians etc. working.
The Globe recently did a big story on how the remodeling industry is recovering fast in Greater Boston. Not all of it is driven by borrowing. Still, a healthy housing market, not surprisingly, leads to more confident homeowners willing to re-invest in homes.