{"id":1106,"date":"2023-09-21T13:47:51","date_gmt":"2023-09-21T13:47:51","guid":{"rendered":"https:\/\/johnsonteamrealestate.com\/?p=1106"},"modified":"2023-10-03T13:48:32","modified_gmt":"2023-10-03T13:48:32","slug":"your-home-equity-can-offset-affordability-challenges","status":"publish","type":"post","link":"https:\/\/johnsonteamrealestate.com\/index.php\/2023\/09\/21\/your-home-equity-can-offset-affordability-challenges\/","title":{"rendered":"Your Home Equity Can Offset Affordability Challenges"},"content":{"rendered":"\n
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Are you thinking about selling your house<\/a>? If so, today\u2019s mortgage rates<\/a> may be making you wonder if that\u2019s the right decision. Some homeowners are reluctant to sell and take on a higher mortgage rate on their next home. If you\u2019re worried about this too, know that even though rates are high right now, so is home equity<\/a>. Here\u2019s what you need to know.<\/p>\n\n\n\n

Bankrate<\/em> explains<\/a> exactly what equity is and how it grows:<\/p>\n\n\n\n

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\u201c<\/em>Home equity is the portion of your home that you\u2019ve paid off and own outright. It\u2019s the difference between what the home is worth and how much is still owed on your mortgage.<\/em><\/strong> As your home\u2019s value increases over the long term and you pay down the principal on the mortgage, your equity stake grows.\u201d<\/em><\/p>\n<\/blockquote>\n\n\n\n

In other words, equity is how much your home is worth now, minus what you still owe on your home loan<\/strong>.<\/p>\n\n\n\n

How Much Equity Do Homeowners Have Now?<\/strong><\/h4>\n\n\n\n

Recently, your equity has been growing faster than you might think. To help contextualize just how much the average homeowner has, CoreLogic<\/em> says<\/a>:<\/p>\n\n\n\n

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\u201c. . . the average U.S. homeowner now has about <\/em>$290,000 in equity<\/em><\/strong>.\u201d<\/em><\/p>\n<\/blockquote>\n\n\n\n

That\u2019s because, over the past few years, home prices went up significantly \u2013 and those rising prices helped your equity to accumulate faster than usual. While the market has started to normalize, there are still more people wanting to buy homes<\/a> than there are homes available for sale<\/a>. This high demand is causing home prices<\/a> to go up again.<\/p>\n\n\n\n

According to the Federal Housing Finance Agency<\/em><\/a> (FHFA), the Census<\/em><\/a>, and ATTOM<\/em><\/a>, a property data provider, nearly two-thirds (68.7%) of homeowners have either fully paid off their mortgages or have at least 50% equity (see chart below<\/em>):<\/p>\n\n\n\n

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That means nearly 70% of homeowners have a tremendous amount of equity right now.<\/strong><\/p>\n\n\n\n

How Equity Helps with Your Affordability Concerns<\/strong><\/h4>\n\n\n\n

With today\u2019s affordability challenges, your equity can make a big difference when you decide to move. After you sell your house<\/a>, you can use the equity you’ve built up in your home to help you buy your next one. Here\u2019s how:<\/p>\n\n\n\n