How Is Your Equity? (The Net Value of Your Home)
We are sitting in an incredible moment in time for homeowners who are ready to sell their houses and make a move this year. So how is your equity? Have you thought about the net value of your home?
Today’s homeowners are, on average, staying in their homes longer than they used to, and this is one item driving increased homeowner equity. When equity grows (the amount between what you owe and what the value of your home is), selling a house becomes increasingly desirable. Here’s a breakdown of why it’s a great time to get the most out of your increased equity gain in today’s market.
As average homeowners stay in their home longer and home prices increase, equity, which is a form of forced savings, can be applied forward to the purchase of a new home. CoreLogic explains:
“Over the past 10 years, the equity position of homeowners has positively changed as a result of more than eight years of rising home prices. As the economy climbed out of the recession in the first quarter of 2010, 25.9% or 12.1 million homes were still underwater, compared to the first quarter of 2020 when the negative equity share was at 3.4%, or 1.8 million properties. Borrowers have seen an aggregate increase of $6.2 trillion in home equity since the first quarter of 2010 and the average homeowner has gained about $106,100 in equity.”
Increasing equity allows many homeowners who are ready to sell their current houses today, to sell for an increased price and therefore, an increased profit. They can then reinvest their earnings in a new home. According to the Q2 2020 U.S. Home Sales Report from ATTOM Data Solutions, in the second quarter of 2020:
“Home sellers nationwide realized a gain of $75,971 on the typical sale, up from the $66,500 in the first quarter of 2020 and from $65,250 in the second quarter of last year. The latest figure, based on median purchase and resale prices, marked yet another peak level of raw profits in the United States since the housing market began recovering from the Great Recession in 2012.”
If you’ve been taking a closer look at your house recently and are thinking it might be time for you to make a move, determining your equity position is a great place to start. Understanding how much equity you’ve earned over time can be a tremendous factor in helping you realize the potential profits in your real estate investment and move toward your next homeownership goal.
Bottom Line
With average home sale profits growing, it’s a great time to leverage your equity and make a move, especially while the number of houses for sale and mortgage rates are historically low. If you’re considering selling your house, contact me today so you can better understand your home equity position and take one step closer to the home of your dreams.
As always, I am here to help you review your options - whether it means staying in your current home, upgrading, moving closer to family, downsizing or upsizing, decreasing the maintenance in your current home, or maybe planning for increased income for your future without the need to save.
If there was nothing to stop you, what would be your next move? Let’s get together and go over your vision …