Home equity can help set you up for financial success, so it’s essential to understand the topic before making any big decisions about selling your house. Let’s talk about what equity is, how much equity homeowners currently have, and how you can make the most of your home equity.
What is equity?
As an article from Bankrate explains, “Home equity is the difference between your home’s value and the amount you still owe on your mortgage. It represents the paid-off portion of your home.”
When you purchase a home and make your down payment, you start off with a certain amount of equity. As you pay down your mortgage, your equity increases. When your home value increases, that builds equity as well, as the portion of the house you’ve paid off is now worth more.
Equity is really a basic math equation: the value of your house minus what you owe on your mortgage.
How much equity do homeowners currently have?
Home values have shot up in the last few years. Since equity builds when home values rise, this means that equity has spiked, too!
CoreLogic tells us that “the average U.S. homeowner with a mortgage still has more than $300,000 in equity.”
Data from the U.S. Census and ATTOM shows that over two-thirds of homeowners have either completely paid off their mortgages (shown in green in the chart below) or have at least 50% equity (shown in blue in the chart below):
If you’ve owned your home for years, you might be surprised at how much equity you have—even if your home is distressed!
How can you make the most of your home equity?
Selling your house when you have substantial equity can really set you up for financial success and help you achieve your goals. Whether that’s getting your dream house or living your dream life! If you’re not buying a new house—maybe you’re combining households or moving into an apartment—you may want to use some of the money to pay off debt, fund your child’s education, or get the RV you’ve always dreamed of.
With inventory expected to rise, 2024 is a good year to make a move and put your home equity to work for you.
Work with MarketPro
When you work with us, we’ll give you a fast cash offer for your current home just as it is now; no repairs, no upgrades, no inspection, no commissions or fees. You can even choose your exact closing date. Our team will walk you through your quote, including a review of what your home would likely get on the open market.
If you’re in Washington, D.C., Maryland, Virginia, Pennsylvania or Florida, we’d love to show you how easy and stress-free the sales process can be. Contact us today for a same-day, no-pressure quote.
