Do you know what your home would actually sell for in today’s market?
For many homeowners, the answer is based on an online estimate, a nearby sale, or a number they heard months or even years ago. But your home’s current market value could tell a very different story.
That matters if moving has been on your mind. Higher home prices and mortgage rates may make a move seem difficult, but there is another part of the equation that is easy to overlook: the equity you have already built.
Years of Homeownership May Have Added Up
Homeowners who purchased several years ago have experienced significant changes in home values. At the same time, every mortgage payment has helped reduce what they owe.
Together, those two things can create equity.
Equity is essentially the difference between your home’s current value and the amount you still owe on it. And for many homeowners, that difference has become substantial.
According to Cotality, the typical homeowner with a mortgage now has $310,500 in equity.
That is a significant financial resource, and it could completely change how you look at your next move.
The national figure is only an average. Equity varies considerably by location, which is why understanding both your local market and your individual property is so important.
The map shows just how much equity homeowners have accumulated across the country. But the number that matters most is not the state or national average.
It is yours.
Knowing approximately how much equity you have can help you understand what is financially possible before you decide whether moving makes sense.
Equity Changes the Conversation About Moving
It is easy to look at today’s mortgage rates and assume staying put is the only practical choice, especially if your current mortgage has a much lower rate.
Rates certainly matter, but they are only one piece of the financial picture.
If you have owned your home for several years, you may be bringing a sizable amount of equity into your next purchase. Instead of approaching your next home as though you are starting over, you may already have a substantial portion of its cost available through the sale of your current property.
That can give you considerably more flexibility when deciding where to go and what you can comfortably afford.
How You Could Put Your Equity to Work
Your plans do not have to look like anyone else’s. You may need a larger home, want something easier to maintain, or simply be ready for a different neighborhood or lifestyle.
Depending on your circumstances, the equity in your current home could help make those plans possible.
Put more money toward your next home.
Using proceeds from your current home for a larger down payment can reduce the amount you need to finance. Borrowing less may also help make your monthly mortgage payment more manageable.
Purchase your next property with cash.
For homeowners with substantial equity, financing may not always be necessary. According to the National Association of Realtors, 26% of repeat buyers purchased their homes with cash in July. For some homeowners, years of accumulated equity can make an all cash purchase possible.
Improve the home you already own.
Moving is not the only option. If you love where you live but your home no longer works for your needs, your equity may provide resources for improvements. Updating a kitchen, changing the floor plan, adding usable space, or completing other renovations could make staying exactly where you are more appealing.
Equity does not make mortgage rates or home prices irrelevant. What it can do is give you choices you might not realize you have.
Start With an Accurate Home Value
Before making assumptions about what you can or cannot do, it helps to have a realistic picture of your home’s current market value.
Online estimates can be useful as a starting point, but they do not always account for your home’s condition, upgrades, location within the neighborhood, current competition, or recent buyer activity.
A professional equity assessment can look at those details and help estimate what your home may sell for in today’s market. From there, you can get a clearer idea of how much equity you may have available after paying off your remaining mortgage.
That information can help you evaluate your options without committing to a move.
You may discover that staying where you are still makes the most sense. Or you may find that a move you thought was out of reach is much more realistic than expected.
Bottom Line
If you have owned your home for several years, there is a good chance your financial position has changed along with its value.
Before ruling out a move because of today’s prices or mortgage rates, find out how much equity you have built. That one number can give you a much clearer picture of what is possible.
If you are curious about your home’s current value, reach out for a personalized Home Equity Assessment. It can help you estimate what your property may sell for, how much equity you may have, and how that equity could factor into your next move.
