You might have several reasons for considering selling your house. As you think this through, one thing that might be on your mind is affordability in today’s housing market. If that’s your main worry, knowing how much equity you have in your home could simplify your decision. Here are two important factors that significantly affect your equity.

How Long You’ve Been in Your Home

Let's talk about homeowner tenure, which refers to the average duration homeowners live in a house before selling or relocating. Between 1985 and 2009, homeowners typically stayed in their homes for about six years.

According to the National Association of Realtors (NAR), that figure has been increasing. Currently, the average tenure is 10 years.

Here’s why that matters. As you pay off your home loan, you're building equity. Plus, as home prices increase, that adds to your equity too. When you look at how much you've paid on your mortgage alongside the rise in home prices over the last decade, it really adds up. If you've been in your home for a while, you could have quite a bit of equity built up.

How Home Prices Appreciate over Time

To illustrate how significant price appreciation can be, check out this data from the Federal Housing Finance Agency (FHFA) displayed in the graph below.

Here’s what that means for you: Home prices can differ depending on where you live, but generally, if you’ve owned your home for five years, you likely saw its value go up by almost 60%. If you’ve been in your home for 30 years, it’s possible that its value has more than tripled during that time.

If you're thinking about downsizing, moving to that dream location, or wanting to be nearer to friends and family, your equity can really make a difference.

Bottom Line

Curious about how much equity you've built over the years and how it can help you purchase your next home? Let's get in touch.