|If you been watching the stock market recently, you may be getting a little discouraged with the amount of money lost day in and day out. With the volatility of the markets along with the uncertainty in the world in many arenas – it’s hard to see the silver lining. But wait … checking the value of your home should come as welcome relief for so many even in these uncertain times. If you’re a homeowner, your net worth got a big boost over the past few years thanks to rising home prices. And that increase in your wealth comes in the form of home equity. |
Equity … is the current value of your home minus what you owe on your mortgage. The way to determine your equity is to take the current value of your home and subtract what you owe/if you owe on your mortgage. (Reach out to a trusted real estate advisor to help you determine your home’s value.) Home prices have appreciated substantially over the past 2+ years due to the limited supply in homes to satisfy the number of buyers out there in search of a new home.
While rising inventory, and mortgage rates rising have certainly cooled the market down some in recent months, home prices nationally do remain strong. According to the latest Homeowner Equity Insights from CoreLogic, the average homeowner’s equity has grown by $60,000 over the last 12 months. While that’s the national number, if you want to know what happened, on average, over the past year in your area … you can check that out on the map below …
|Why This Is So Important Right Now? Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), helps explain why this matters so much today. “Unfortunately, the decline in the stock market has dented many’s overall net wealth. It has fallen by $6 trillion from the first to the second quarter. Only housing wealth has held on, with homeowners’ real estate wealth (home value minus mortgage balance) rising by $1.2 trillion.”|
While equity helps increase your overall net worth, it can also help you achieve other goals like the purchase of your next home. When you sell your current home, the equity you have built up over the years, is realized in your sale, and it may be just what you need to cover a large portion – if not all of the down payment on your next home. When I speak with some sellers today, some say … “I want to sell, but I don’t want to over-pay on my new home purchase.” It’s important to understand home prices have risen substantially over the last couple of years … which is great news for the sellers – that value gain on your sale is then reinvested in your new home purchase. So at the end of the day – it all balances out. As much as we all want our cake and eat it to, if you will – you can’t have it both ways – right? Gained value (equity) on the sale of your current home helps you to move forward on your next purchase …
There’s volatility in today’s stock market no doubt, but home equity is still very strong. To find out just how much equity you have in your current home, reach out to me … your trusted real estate advisor. I’m here to help!
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