Equity Is a Game Changer for Homeowners Looking To Sell

If you're a homeowner, you might be torn on whether or not tosell your houseright now. Maybe that's because you don't want to take on a highermortgage rateon your next home. If that's yourbiggest hurdle, understanding your equity may be exactly what you need to help you feel more comfortable making your move.

What Equity Is and How It Works

Equity is the current value of your home minus what you owe on the loan. And recently, thatequityhas been growing far faster than you may expect.

Over the last few years, home prices rose dramatically, and that gave your equity a big boost very quickly. While the market hasstarted to normalize, there's still an imbalance between thenumber of homesavailable for sale and thenumber of buyerslooking to make a purchase. And it's because homes are in such high demand thatpricesare back on the rise today. Rob Barber, CEO of ATTOM, a property data provider,explains:

Equity levels were high even during the recent downturn, and now they are going back up and better than ever.

How Equity Benefits You in Today's Market

With today'saffordability challenges, that equity can be a game changer when you move. Here's why. Based on data fromATTOMand theCensus, nearly two-thirds (68.7%) of homeowners have either paid off their mortgages or have at least 50% equity (see chart below):

That means roughly 70% have a tremendous amount of equity right now.

Once yousell your house, you can use your equity to help with your next purchase. It could be some (if not all) of what you'll need for your next down payment. It may even be enough to allow you to put a considerably larger down payment on your next home, so you don't have to finance quite as much. And, if you've been in your current house for years, you may have even built up enough equity to pay in all cash. If that's true for you, you'd be able to avoid borrowing altogether, so you wouldn't have to worry about today'smortgage rates.

How To Find Out How Much Equity You Have

The best way to learn how much you have is to reach out to a trusted real estate agent for a Professional Equity Assessment Report (PEAR).

Bottom Line

If you're planning tomake a move, the equity you've gained can make a big impact. To find out just how much equity you have in your current home and how you can use it to fuel your next purchase, let's connect.