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Home Equity Can Be a Game Changer When You Sell

Ronny Gutierrez • Feb 24, 2024

Are you on the fence about selling your house?

a roll of money is tied with a red rubber band . #MsGRealEstate

While affordability is improving this year, it’s still tight.  And that may be on your mind.  But understanding your home equity could be the key to making your decision easier.  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.


You’ll start off with a certain level of equity when you make your down payment to buy the home, then continue to build equity as you pay down your mortgage. You’ll also build equity over time as your home’s value increases.”


Think of equity as a simple math equation.  It’s the value of your home now minus what you owe on your mortgage. And guess what? Recently, your equity has probably grown more than you think.  In the past few years, home prices skyrocketed, which means your home’s value – and your equity – likely shot up, too.  So, you may have more equity than you realize.  How To Make the Most of Your Home Equity Right Now If you’re thinking about moving, the equity you have in your home could be a big help.  According to CoreLogic:


“. . . the average U.S. homeowner with a mortgage still has more than $300,000 in equity . . .”


Clearly, homeowners have a lot of equity right now.  And the latest data from the Census and ATTOM shows 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):


a pie chart showing americans sitting on tremendous equity. #MsGRealEstate

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


After you sell your house, you can use your equity to help you buy your next home. Here’s how:


  • Be an all-cash buyer: If you’ve been living in your current home for a long time, you might have enough equity to buy your next home without having to take out a loan. If that’s the case, you won’t need to borrow any money or worry about mortgage rates.  Investopedia states:
“You may want to pay cash for your home if you’re shopping in a competitive housing market, or if you’d like to save money on mortgage interest.  It could help you close a deal and beat out other buyers.”
  • Make a larger down payment: Your equity could also be used toward your next down payment. It might even be enough to let you put a larger amount down, so you won’t have to borrow as much money. The Mortgage Reports explains:
“Borrowers who put down more money typically receive better interest rates from lenders.  This is due to the fact that a larger down payment lowers the lender’s risk because the borrower has more equity in the home from the beginning.”


The Easy Way To Find Out How Much Equity You Have


To find out how much equity you have in your home, ask a real estate agent you trust for a Professional Equity Assessment Report (PEAR). 


Bottom Line


Planning a move? Your home equity can really help you out. Connect with a local real estate agent to see how much equity you have and how it can help with your next home.

a man is sitting at a desk drawing a graph with houses on it. #MsGRealEstate

2024 Home Price Forecast Revised Up

By Ronny Gutierrez • 26 Feb, 2024
Over the past few months, experts have revised their 2024 home price forecasts based on the latest data and market signals, and they’re even more confident prices will rise, not fall. So, let’s see exactly how experts’ thinking has shifted – and what’s caused the change
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Home Equity Can Be a Game Changer When You Sell

By Ronny Gutierrez • 24 Feb, 2024
The latest data from the Census and ATTOM reveals that a substantial majority of homeowners either own their homes outright or have at least 50% equity.
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Ms. G - Ronny Gutierrez @ 973.440.5998 :: Your Neighborly Weichert Realtors® in the Tri-State

Finding the Perfect Realtor Near Me: Your Guide to Local Real Estate Experts

By Ronny Gutierrez • 09 Aug, 2023
When it comes to real estate, having a realtor near you can be a game-changer. Their local market knowledge, personalized service, extensive network, and community insights can help you navigate the complexities of buying or selling a property. Take your time to research and find the perfect realtor who understands your needs and is dedicated to achieving your real estate goals. So, start your search for a realtor near you today and unlock the expertise and support you need for a successful real estate journey
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What Happens to Housing when There’s a Recession?

By Ronny Gutierrez • 08 Feb, 2023
What Happens to Housing when There’s a Recession? Since the 2008 housing bubble burst, the word recession strikes a stronger emotional chord than it ever did before. And while there’s some debate around whether we’re officially in a recession right now, the good news is experts say a recession today would likely be mild and the economy would rebound quickly. As the 2022 CEO Outlook from KPMG says : “Global CEOs see a ‘mild and short’ recession, yet optimistic about global economy over 3-year horizon . . . More than 8 out of 10 anticipate a recession over the next 12 months, with more than half expecting it to be mild and short .” To add to that sentiment, housing is typically one of the first sectors to rebound during a slowdown. As Ali Wolf, Chief Economist at Zonda, explains : “Housing is traditionally one of the first sectors to slow as the economy shifts but is also one of the first to rebound .” Part of that rebound is tied to what has historically happened to mortgage rates during recessions. Here’s a look back at rates during previous economic slowdowns to help put your mind at ease. Mortgage Rates Typically Fall During Recessions Historical data helps paint the picture of how a recession could impact the cost of financing a home. Looking at recessions in this country going all the way back to 1980, the graph below shows each time the economy slowed down mortgage rates decreased. Fortune explains mortgage rates typically fall during an economic slowdown: “ Over the past five recessions, mortgage rates have fallen an average of 1.8 percentage points from the peak seen during the recession to the trough. And in many cases, they continued to fall after the fact as it takes some time to turn things around even when the recession is technically over.” While history doesn’t always repeat itself, we can learn from and find comfort in the trends of what’s happened in the past. If you’re thinking about buying or selling a home, you can make the best decision by working with a trusted real estate professional . That way you have expert advice on what a recession could mean for the housing market. Bottom Line History shows you don’t need to fear the word recession when it comes to the housing market. If you have questions about what’s happening today, let’s connect so you have expert advice and insights you can trust.
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