Thinking about selling your house? Well, you might be pondering whether it's the right move given today's mortgage rates. I get it, the idea of selling and having to deal with higher rates on your next home can be a bit daunting. But here's the good news: while rates are currently high, so is the value of your home. Let me fill you in on what you need to know.

““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.””

— Bankrate

Basically, equity is just the difference between how much your home is currently valued at and the amount you still owe on your loan.

How Much Equity Do Homeowners Have Now?

Did you know that your equity is actually growing faster than you might expect? According to CoreLogic, the average homeowner has seen a significant increase in their equity recently.

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

— CoreLogic

Well, you see, in the past few years, the prices of homes went up quite a bit. And this increase in prices actually helped your equity grow faster than usual. Now, while the housing market is starting to stabilize a bit, there are still more people who want to buy homes than there are homes up for sale. And because of this high demand, the prices of homes are going up once again.

According to a bunch of fancy organizations like the Federal Housing Finance Agency (FHFA), the Census, and ATTOM (they're like data experts for properties), almost 70% of homeowners are in a pretty sweet spot. What I mean is, they either have paid off their mortgages completely or they've got at least half of their home's value as equity. That's a pretty nice situation to be in, don't you think? Just take a look at the chart below to see for yourself.

So, basically, what I'm saying is that almost 70% of homeowners have a ton of equity at this very moment. Can you believe it? It's pretty incredible, if you ask me.

How Equity Helps with Your Affordability Concerns

With the way things are going these days, buying a new home can sometimes be a pricey affair. But guess what? Your equity can really come to the rescue when you're ready to make a move. So, once you sell your house, you can tap into the equity you've built up over the years to help you out with buying your next dream home. Let me break it down for you:

• Be an all-cash buyer: If you've been in your current home for a while, there's a chance you've built up enough equity to get a new house without needing a loan. That means you won't have to borrow any money or stress about mortgage rates. According to the National Association of Realtors (NAR):

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

— National Association of Realtors (NAR)

• Make a larger down payment: If you already own a home, you can actually use the money you've built up in your home's value to help with your next down payment. This could mean you'll be able to put down a bigger chunk of money and borrow less, which will also make current interest rates less of a concern. According to Experian, using your equity in this way can be a smart strategy.

““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.””

— Experian

Bottom Line

If you're considering a move, the equity you've accumulated can have a major impact, especially in today's market. Let's chat and figure out how much equity you have in your current home and explore how you can leverage it for your next dream home. Sound good? Let's connect!