Wondering about selling your home? The first thing you should do is figure out how much equity you have. This will help you understand what you can afford when you decide to move. With home prices increasing significantly over the past few years, many homeowners are likely sitting on more equity than they think

Let’s take a closer look at what you should consider if you're thinking about selling your investment and using the equity for your next home.

Home Equity: What Is It and How Much Do You Have?

Home equity is simply the amount of value you have in your home after subtracting what you owe on your mortgage. So, if your home is valued at $400,000 and you still owe $200,000 on your mortgage, then your home equity would be $200,000.

Recent data from the Census and ATTOM reveals that many Americans currently hold a substantial amount of equity in their homes. In fact, over two-thirds of homeowners either own their homes outright (represented in green in the chart below) or have at least 50% equity (depicted in blue in the chart below).

More homeowners are seeing bigger returns on their investments when they sell their homes these days. And having that much equity can really help you with your next move.

What You Should Do Next

If you're considering selling your house, it's crucial to understand how much equity you have and what that means for your sale and potential profits. Working with your agent can give you a clearer understanding, and consulting with a tax professional or financial advisor can also be beneficial. Having a team of experts on your side can help you navigate your unique situation and make informed decisions moving forward.

Bottom Line

Home prices have risen,