Thinking about selling but worried about rising mortgage rates? With a huge amount of homeowners having a <3% mortgage rate, many are reluctant to sell and move onto their next home (even if they really want a bigger home, more space, a better location, or whatever other reason someone might move for). Higher rates are on everyone’s minds, but let's flip the script and talk about something that's been quietly stacking up in your favor… your home's equity.
What's Equity And Why Should I Care?
If you’re a homeowner, it’s important you know exactly what equity means. In simple terms, it's the portion of your house you actually own, i.e., your home's current value minus what you still owe on the mortgage. And guess what? The more you pay down and the more your home's value goes up, the bigger your slice of the equity pie.
📮 RELATED POST: WHAT CAN YOU DO WITH YOUR HOME EQUITY
Equity Growth At An All Time High
A recent study by CoreLogic showed that the average US homeowner is sitting on about $290,000 in equity. Why? Home prices have soared recently, supercharging your equity growth. And even though the market has been cooling down nationwide, there are still more buyers than houses for sale. That means your home's value is still climbing.
We’re seeing this even moreso in South Jersey. While many markets nationwide have seen a drop in buyer activity, it’s still a fairly fiery market in our home town of 08108 and beyond.
There’s still many Philadelphia and NYC residents looking for suburban-living, while not wanting to give up their city-esque amenities. And many towns in South Jersey offer this. South Jersey is also missing a lot of the new construction we see in other states, like Texas. This is largely due to the state already being so densely-built upon… there’s simply not the land for new homes!
With so little supply on top of the consistent demand, it’s no wonder home price appreciation is sky high in South Jersey. This means homeowners are enjoying a LOT of equity. Not only that: nearly 70% of homeowners have either completely paid off their mortgage, or have at least 50% equity.
How Equity Can Help Your Move
If you’re feeling the pinch by today's affordability challenges but are still looking to move house, the equity you’ve built up in your property can really help you out. Here's two ways:
- Be an all-cash buyer. If you’ve actually been living in your home for a number for years, you might have enough equity built up that you could buy your next property all-cash! Naturally this would help assure any concerns of how to avoid those rising interest rates.
- Boost your downpayment. Rising mortgage rates become less of a concern if you’re not borrowing as much. A larger downpayment, paid for with your home’s equity, would help reduce the amount of debt you have.
If you’ve been thinking...
...about making a move, the equity you’ve accrued can make a huge difference in your financial plans. Do you want to know how much equity you have in your home? Or do you have questions about how to use your equity? Send us a message today.
