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One of the benefits of being a homeowner is that you build equity over time. By selling your house, that equity can be used toward purchasing your next home. But before you can put it to use, you should understand exactly what equity is and how it grows. Bankrate explains it like this:
“Home equity is the portion of your home you’ve paid off – in other words, your stake in the property as opposed to the lender’s. In practical terms, home equity is the appraised value of your home minus any outstanding mortgage and loan balances.”
Majority of Americans Have a Large Amount of Equity
If you’ve owned your home for a while, you’ve likely built up some equity – and you may not even realize how much. Based on data from the U.S. Census Bureau and ATTOM, the majority of Americans have a substantial amount of equity right now (see graph below):
And having such large amounts of equity is a benefit to homeowners in more ways than one. Rick Sharga, Executive Vice President of Market Intelligence at ATTOM, explains:
“Record levels of home equity provide security for millions of families, and minimize the chance of another housing market crash like the one we saw in 2008.”
Over time, your home equity grows. In addition to providing financial stability while you own your house, when you’re ready to sell it, that money could go a long way toward paying for your next home.
Bottom Line
By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect today so you can find out how much home equity you have and start planning your next move.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Primary Residential Mortgage, Inc and Keeping Current Matters, Inc. do not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Primary Residential Mortgage, Inc and Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
Sources:
Lee, Jeanne. “What Is Home Equity and How Does It Work? | Bankrate.” Bankrate, edited by Suzanne De Vita, 22 Oct. 2022, www.bankrate.com/home-equity/what-is-home-equity.
United States Census Bureau. “Explore Census Data | Mortgage Tables.” United State Census Bureau, data.census.gov/all?q=mortgage. Accessed 13 Mar. 2023.
ATTOM Team. “Home Equity Flattens Out Across U.S. in Fourth Quarter of 2022.” ATTOM, 2 Feb. 2023, www.attomdata.com/news/market-trends/home-sales-prices/attom-q4-2022-u-s-home-equity-and-underwater-report.
Kim, Connie. “Almost 45% of Homeowners Are Now Equity Rich.” HousingWire, 12 May 2022, www.housingwire.com/articles/almost-45-of-homeowners-are-now-equity-rich.