EquityBuild - From the most recent numbers the Federal has in its vault of housing data show that homeowner’s equity has risen by a staggering $2.2 trillion dollars in just one year. From 3Q2012 to 3Q2013, equity across the country has begun to lift all real estate boats.

Yes, there are still pockets where propertyhome equity recovers values are less than what is owed but those areas are slowly recovering as well. Increased equity can help accelerate the local real estate market in a variety of ways. Good ones.

When a homeowner is upside down on the mortgage, unless the bank agrees to a short sale, the homeowner is stuck and must bring thousands of dollars to the closing table just to get out from under the home. The property owner may be desperate to sell but can’t due to the lack of equity. But with equity, the homeowner can not only sell but also have enough funds left over to buy another property—yours. The more potential buyers you have in your market the more you can get from your unit.

Property owners with newfound equity now have access to another financial tool that seemed to take a vacation a few years ago— a home equity line of credit, or HELOC. Homeowners can secure a line of credit on the various properties they own to access whenever they want. A HELOC can be used to pay off consumer debt, get rid of a car payment, pay college tuition or generate funds to be used as a down payment on a new investment property.

Equity also allows property owners to refinance their existing loans. Refinancing an existing mortgage for a rental property typically requires at least a 20 to 25 percent equity position in most cases, especially if the mortgage isn’t currently owned by Fannie Mae or Freddie Mac. Refinancing an existing rate to a lower one not only increases cash flow for the real estate investor but helps the investor qualify for a new rental property loan due to the lower overall monthly payments.

It took a while for homeowners to see some of their equity back. After all, property values plummeted during the housing crisis. It was a long journey back. There are still areas that are suffering and we’re not all the way back in many areas. But any increase in equity is a boon for investors all the way around.