Social Links Widget

Click here to edit the Social Media Links settings. This text will not be visible on the front end.

Front Porch • September 27, 2023

Your Home Equity Can Offset Affordability Challenges

by Victoria Douglas
Nav NavigateRE Marketing Team

Marketing Team

Our in house marketing team of designers, analysts, artists and technology gurus are constantly offering strategically driven marketing solutions and custom tailored work to meet the individual needs of our clients.

NAVIGATE Logo (2000 × 667 px)

Published on
Recent Posts

Get in Touch

Featured Properties


2042 4th Street Featured Image (1920 × 810 px)

2042 4th St, San Rafael, CA

Well maintained and well established commercial units. Located in a highly visible, high traffic area on 4th Street within the famous Miracle Mile. 2042…

Read More


NAV: Pioneer Apartments For Sale (1200 × 800 px)

2010 Pioneer Way Santa Rosa, CA

a 178-unit apartment community located at 2010 Pioneer Way in Santa Rosa, California. Pioneer Apartments consists of 100 one-bedroom/one-bath units and 78 two bedroom/one-and-one-half…

Read More


NAV The Palms For Sale (1200 × 800 px)

The Palms Apartments

The Palms Apartments, a 60-unit apartment community located at 128-170 Santa Alicia Drive in Rohnert Park, California. The Palms Apartments at 128-170 Santa Alicia…

Read More


Your Home Equity Can Offset Affordability Challenges

Are you thinking about selling your house? If so, today’s mortgage rates may be making you wonder if that’s the right decision. Some homeowners are reluctant to sell and take on a higher mortgage rate on their next home. If you’re worried about this too, know that even though rates are high right now, so is home equity. Here’s what you need to know.

Bankrate explains exactly what equity is and how it grows:

“Home equity is the portion of your home that you’ve paid off and own outright. It’s the difference between what the home is worth and how much is still owed on your mortgage. As your home’s value increases over the long term and you pay down the principal on the mortgage, your equity stake grows.”

In other words, equity is how much your home is worth now, minus what you still owe on your home loan.

How Much Equity Do Homeowners Have Now?

Recently, your equity has been growing faster than you might think. To help contextualize just how much the average homeowner has, CoreLogic says:

“. . . the average U.S. homeowner now has about $290,000 in equity.”

That’s because, over the past few years, home prices went up significantly – 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 than there are homes available for sale. This high demand is causing home prices to go up again.

According to the Federal Housing Finance Agency (FHFA), the Census, and ATTOM, 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):

 

That means nearly 70% of homeowners have a tremendous amount of equity right now.

How Equity Helps with Your Affordability Concerns

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

  • Be an all-cash buyer: If you’ve been living in your current home for a long time, you might have enough equity to buy a new house without having to take out a loan. If that’s the case, you won’t need to borrow any money or worry about mortgage rates. The National Association of Realtors (NAR) states:

“These all-cash home buyers are happily avoiding the higher mortgage interest rates . . .”

  • Make a larger down payment: Your equity could be used toward your next down payment. It might even be enough to let you put a larger amount down, so you won’t have to borrow as much money so today’s rates become less of a sticking point. Experian explains:

“Increasing your down payment lowers your principal loan amount and, consequently, your loan-to-value ratio, which could lead to a lower interest rate offer from your lender.”

Bottom Line

If you’re thinking about moving, the equity you’ve built up can make a big difference, especially today. To find out how much equity you’ve got in your current house and how you can use it for your next home, let’s connect.


Why Is So Low

Why Is Housing Inventory So Low?

🏡 Why is it so hard to find a house to buy? And while it may be tempting to wait it out until you have more options, that’s probably not the best strategy. Here’s why.

Read More



Where Are People Moving Today and Why?

📦 Plenty of people are still moving these days. And if you’re thinking of making a move yourself, you may be considering the inventory and affordability challenges in the housing market…

Read More


Related Articles
Front Porch Now’s the Time To Upgrade to Your Dream Home 🏡 Why is it so hard to find a house to buy? And while it may be tempting to wait it out until you have more options, that’s probably not the best strategy. Here’s why.
Front Porch Why Buying Now May Be Worth It in the Long Run 🏡 Why is it so hard to find a house to buy? And while it may be tempting to wait it out until you have more options, that’s probably not the best strategy. Here’s why.
Front Porch Is Your House Priced Too High? 🏡 Why is it so hard to find a house to buy? And while it may be tempting to wait it out until you have more options, that’s probably not the best strategy. Here’s why.
victoria-douglas-logo-white

CONNECT

+1 510.375.6082

victoriadouglashomes@gmail.com

Lic# 02075898

AREAS SERVED

SOLANO | NAPA |SONOMA
SACRAMENTO LAKE | MARIN COUNTIES

Navigate Dark Background

Terms Of Use | Privacy Policy | Accessibility Statement | Fair Housing Notice

© 2023 NAVI