GROW YOUR EQUITY!
It is true that over the previous few years, unprecedented home price increase has resulted in large equity gains for homeowners. According to CNBC's real estate correspondent Diana Olick:
“The stunning jump in home values over the course of the Covid-19 pandemic has given U.S. homeowners record amounts of housing wealth.”
A research was conducted by the National Association of Realtors (NAR) to determine the normal equity gains across longer time periods. You might be inspired to move by the data they gathered. Just keep in mind that you should obtain a professional equity evaluation from a reputable real estate advisor to determine how much equity you have in your particular residence.
How Your Equity Grows
Let's begin by defining how equity in your house is created. While price growth is undoubtedly an aspect that might help increase your equity, you also gradually increase equity as you pay off your mortgage. NAR clarifies:
“Home equity gains are built up through price appreciation and by paying off the mortgage through principal payments.”
Average Equity Growth over Time
Work with a reputable real estate agent to get your home's equity assessed if you want to know how much equity you have. They may offer a professional assessment on the current market value of your property and how the equity you've built up over time will benefit you when you buy your next house. You could only need a portion of it, if not all of it, for your subsequent down payment.
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