Right Now Homeowners Have A Lot of Equity to Leverage
Despite the fact that home prices have dropped in the recent year, many homeowners still have a significant amount of equity. But what is equity? In the simplest terms, equity is the difference between the market value of your home and the amount you owe on your mortgage. The National Association of Realtors (NAR) explains how your equity grows over time:
“Housing wealth (home equity or net worth) gains are built up through price appreciation and by paying off the mortgage.”
How Your Equity Can Help You Achieve Your Goals
When you sell your present home and buy your next one, you can leverage the equity you've built up over the years to your benefit. If you no longer have enough space, it may be time to relocate to a larger house. It's also possible that you have too much space and need something smaller. Whatever your circumstances, your equity can be a powerful instrument to help you make a move in today's market. That's because it could cover some (if not all) of your down payment for your next property.
And how much equity you have may surprise you. A recent survey from Realtor.com finds many homeowners today estimate they’ve built up a significant amount of equity:
“While equity gains contracted in late 2022 due to home price declines in some regions, U.S. homeowners on average still have about $270,000 in equity, nearly $90,000 more than they had at the onset of the pandemic.”
How a Skilled Real Estate Agent Can Help
If you’re looking to leverage your equity to boost your buying power in today’s market, having a trusted agent by your side makes a difference.
A real estate professional can help you better understand the value of your home, so you’ll get a clearer picture of how much equity you likely have. As a recent article from Bankrate says:
“Hiring a skilled real estate agent can give you a realistic estimate of home prices in your area and how to price your current home. Using that figure, you can calculate how much equity you have and what your net proceeds will look like, so you can apply that money toward the down payment and closing costs of your new home.”
When it comes to making decisions about purchasing or selling a house, knowing your equity is critical. A knowledgeable agent can guide you through the often-complicated process of selling your home and ensure a seamless transaction.
Many homeowners now have significant equity in their homes, and you may be one of them. Let's talk so we can determine how much equity you have and discuss how you might use it to buy your next house.