How Much Home Equity Have You Gained? The Answer Might Surprise You

Have you ever stopped to think about how much wealth youve built up just from being a homeowner? As home values rise, so does your net worth. And, if youve been in your house for a few years (or longer), theres a good chance youre sitting on a pile of equity maybe even more than you realize.

What Is Home Equity?

Home equity is the difference between what your house is worth and what you owe on your mortgage. For example, if your house is worth $500,000 and you still owe $200,000 on your home loan, you have $300,000 in equity. Its essentially the wealth youve built through homeownership. Right now, homeowners across the country are seeing record amounts of equity.

According to Intercontinental Exchange (ICE), the average homeowner with a mortgage has $319,000 in home equity.

Why Have Homeowners Gained So Much Equity?

The rise in home equity over the years can be credited to two key factors:

1. Significant Home Price Growth

Home prices have climbed dramatically in recent years. In fact, according to the Federal Housing Finance Agency (FHFA), over the past five years, home prices nationwide have risen by 57.4% (see map below):

This appreciation means your house is likely worth much more now than when you first bought it.

2. Longer Tenure in Homes

Data from the National Association of Realtors (NAR) shows people are staying in their homes for a decade (see graph below):

This increased tenure means homeowners benefit even more from home values growing over time. Thats because the longer someone has lived in their house, the more that homes value has grown, which directly increases equity.

And if youre one of those people whos been in their home for 10 years or more, know this according to NAR:

Over the past decade, the typical homeowner has accumulated $201,600 in wealth solely from price appreciation.

The Benefits of Having Home Equity

What does that mean for you? It means your house might be your biggest financial asset and it could open up some exciting opportunities for your future. Lets break it down.

• Moving to Your Next Home

Your equity could help you cover the down payment for your next home. In some cases, it might even mean you can buy your next house all cash.

• Financing Home Improvements

Thinking about upgrading your kitchen, adding a home office, or tackling other projects? Your equity can provide the funds to make those improvements happen, increasing your homes value and making it more enjoyable to live in too.

• Getting a Business Going

If youve been dreaming about starting your own business, your equity could be the kickstart you need. Whether its for startup costs, equipment, or marketing, leveraging your homes value can help bring your entrepreneurial goals to life.

Bottom Line

Whether youre thinking about selling, upgrading, or simply want to understand your options, your home equity is a powerful resource. If youre wondering how much equity youve built or how you can use it to meet your goals, connect with a local real estate agent to explore the possibilities.

Venessa James - Broker Associate    

ABR, ALHS, CHMS, MCNE, LUXE, SFR, SRS  

Platinum Experience Group - KW Professionals 

(281) 889-8292 platinumexperiencegroup.com

Integrity, Experience, Results