When was the last time you took a close look at your home's value? For many homeowners, it's easy to forget about this important asset, especially when it's not something you check regularly. But here’s the thing—your home could be worth far more than you realize. Whether you're planning to sell, upgrade, or simply curious about your investment, understanding your home’s true value can open the door to exciting opportunities. Let’s take a closer look at why now might be the perfect time to check in on your home’s worth!
What Is Home Equity?
This wealth you may not even realize you have comes in the form of home equity. Home equity is the difference between what your home is worth and what you still owe on your mortgage. It builds over time as your property’s value increases and as you pay down your loan. Here’s an example to show you how this works:
Let’s say your home is now worth $500,000, and you have $200,000 left on your mortgage. That means you have $300,000 in equity—And most homeowners are sitting on some pretty significant equity right now.
According to Cotality (formerly CoreLogic), the average homeowner with a mortgage has around $311,000 in equity.
Why You Probably Have More Than You Think
So, why are so many homeowners sitting on record amounts of equity? There are two key reasons:
1. Significant Home Price Growth. According to the Federal Housing Finance Agency (FHFA), home prices have jumped by more than 57% nationwide over the last five years (see map below):
And if you purchased your home a few years ago (or more), this means your house is likely worth much more now than when you first bought it, thanks to how much prices have climbed lately.
2. People Are Living in Their Homes Longer. Data from the National Association of Realtors (NAR), shows the average homeowner stays in their home for about 10 years now (see graph below):
That’s longer than it used to be. And over that decade? You’ve built equity just by making your mortgage payments and riding the wave of rising home values.
So, if you’re one of those people who’s been in their home for that long, here’s how much the behind-the-scenes price growth has helped you out. According to NAR:
“Over the past decade, the typical homeowner has accumulated $201,600 in wealth solely from price appreciation.”
What Could You Actually Do with That Equity?
Your home may be your biggest financial asset—and if you leverage your equity wisely, it can create some exciting opportunities for you:
- Use it for your next home. Your equity could cover a down payment on your next property—or even help you buy your next home in full cash, depending on how much equity you’ve built.
- Renovate your current home. If you’re not ready to move but want to make your space work better for you, your equity can help fund renovations. Plus, some projects might even increase your home’s value when it’s time to sell.
- Start that dream business. If entrepreneurship has been calling your name, your home’s equity might be the perfect way to fund your startup costs and equipment, giving you the boost you need to start your own venture.
Chances are, your home is worth far more than you realize. Whether you’re considering selling, upgrading, or simply want to explore your options, your home equity is a powerful tool.
If you sold your house today and had significant equity to work with, what would you do with it? Let’s explore how to unlock your home’s value and turn it into your next big move, reach out to our team today at 469-296-8479.
