Key Equity Insights Every Homeowner Needs to Know

Thinking about selling your home? The first step is understanding your equity, which will help you determine what you can afford when you move. Given the significant rise in home prices over the past few years, many people have more equity than they realize.

Here's a closer look at what you need to know if you're ready to cash in on your investment and use your equity for your next home.

Understanding Home Equity: What It Is and How Much You Have

Home equity is the difference between your home's market value and the remaining balance on your mortgage. For instance, if your house is valued at $400,000 and your mortgage balance is $200,000, your equity would be $200,000.

Recent data from the Census and ATTOM indicates that Americans currently have substantial equity. In fact, over two-thirds of homeowners have either fully paid off their mortgages (illustrated in green in the chart below) or have at least 50% equity in their homes (illustrated in blue in the chart below):

Today, more homeowners are seeing a greater return on their investment when they sell their homes. If you have substantial equity, it can be a powerful resource to support your next move.

Your Next Steps

If you're considering selling your house, it's crucial to understand how much equity you have and what it means for your home sale and potential earnings. To get a clear picture, work with your agent and consult a tax professional or financial advisor. A team of experts can help you comprehend your specific situation and guide you through the process.

Bottom Line

With home prices on the rise, your equity has likely increased significantly. Connect with a local real estate agent to get an accurate assessment of your home’s equity and move forward with confidence when you decide to sell.