If you’re a homeowner who has owned their house for a few years, there’s a valuable asset you should be aware of – your home equity. Home equity is the difference between your home’s current market value and the amount you owe on your mortgage. Over time, as you make mortgage payments and as home values appreciate, your home equity grows. In this blog, we’ll explore the significance of home equity and how it can play a crucial role in helping you achieve your goals.
The Rising Value of Home Equity
Despite a brief dip in home prices last year, they have rebounded and continued to climb in many areas. This upward trend in home prices has positive implications for homeowners. According to Selma Hepp, Chief Economist at CoreLogic, “With price gains continuing to help homeowners build wealth, equity has reached a new high and regained losses that resulted from declines last year.” In fact, the average U.S. homeowner gained over $20,000 in additional equity compared to the third quarter of 2022, and some markets are experiencing even larger increases as price growth catches up.
To provide a broader perspective, the average homeowner with a mortgage now has more than $300,000 in equity. Such a substantial equity holding can have a significant impact on your financial goals.
Putting Your Home Equity to Work
Here are some practical ways you can leverage your home equity to achieve your objectives:
- Buy a Home That Fits Your Needs: If your current home no longer suits your lifestyle or family size, you can use your equity as a down payment on a new home that better meets your needs. Whether you’re looking to upsize or downsize, your home equity can facilitate the move.
- Reinvest in Your Current Home: If you’re not ready to move but want to enhance your living space, consider using your home equity for renovations or upgrades. Consult a real estate agent for advice on projects that will yield the highest return on investment when you eventually sell your home.
- Pursue Personal Ambitions: Home equity can serve as a financial catalyst for realizing personal ambitions, such as starting a new business, funding your retirement, or pursuing higher education. Responsible use of your equity for meaningful goals can have a transformative impact on your life.
- Understand Your Options to Avoid Foreclosure: While foreclosure rates remain below average, some homeowners still face financial challenges. In such situations, understanding your options is essential. Your home equity can provide a cushion to help you make mortgage payments during challenging times.
Bottom Line
If you’re curious about how much equity you’ve built up in your home, it’s a wise idea to seek professional guidance. Connect with us at [Your Real Estate Brand], your trusted local real estate experts located in League City, TX, and serving the Houston to Galveston area. We can provide you with a professional equity assessment report and discuss how you can strategically use your home equity to reach your financial goals. Your home is not just a place to live; it’s a valuable asset that can help you build the life you love. Let’s talk about your options today.