Many homeowners have a large amount of equity, even though home prices have slowed down over the past year. What is equity? Equity is the difference between your home’s market value and the amount of mortgage you owe. The National Association of Realtors explains how equity grows over time. “Housing wealth (home value or net worth) gains can be built up by paying off your mortgage and price appreciation.” How Your Equity Can Help you Achieve Your DreamsThe equity that you have built over the years will help you achieve your goals when you sell your home and buy your new one. It might be time to upgrade your home if you don’t have enough space. You may need a smaller home if you have too much room. Your equity can be an important tool to help you decide what you want to do in today’s market. It may be enough to cover your down payment for your next home. And the amount of equity you have might surprise you. Recent data from CoreLogic confirms that homeowners feel good about their equity. Selma Hepp is the Chief Economist at CoreLogic. She says: “While equity gains contracted late 2022 due home price declines, U.S. home owners on average still have approximately $270,000 in equity. This is nearly $90,000. A recent article by Bankrate states: “Hiring a real estate agent with experience can help you get a realistic estimate on home prices in your locality and how to price your home.” You can use that figure to calculate your equity and your net proceeds, and then apply that money towards the down payment and closing cost of your new home. A skilled agent will help you navigate through the complicated process of selling your home and ensure that the transaction is smooth. Bottom LineMany homeowners today have substantial equity. You may be one of those. A real estate agent will help you determine how much equity you possess and how you can use that money to purchase your next home.
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