Tuesday, January 30, 2024 / by Bell Home Team
If you've been a homeowner for a while, the term "home equity" becomes more than just a phrase – it's a key aspect of your financial landscape. According to Freddie Mac, home equity is defined as the difference between your home's current value and the outstanding balance on your mortgage. As you steadily pay down your mortgage and witness the rise in home values, your equity naturally grows. While there may have been a slight dip in home prices last year around the nation, the Onondaga County market has remained strong, with growing median sale prices month-over-month. The rebound has been significant, bringing favorable news for homeowners.
In the most recent Equity Insights Report, CoreLogic's Chief Economist, Selma Hepp, highlights the positive impact of price gains on homeowners' wealth. Not only has equity reached new highs, but homeowners across the U.S. gained over $20,000 in additional equity compared to the third quarter of 2022. Some markets are experiencing even larger increases as they catch up with robust price growth.
Understanding the significant role home equity plays, the report reveals that some homeowners with a mortgage have accumulated soaring six-digit figures in equity. These substantial figures open the door to various opportunities that can enhance your financial well-being.
Putting Your Home Equity to Work: Practical Applications
- Buy a Home That Fits Your Needs: If your existing living space falls short of your requirements, it could be an opportune moment to consider transitioning to a larger residence. Conversely, if you find yourself with more space than necessary, downsizing to a more compact home might be the perfect solution. In either scenario, utilizing your accrued equity can contribute to a down payment on a property that better aligns with your evolving lifestyle.
- Invest in Home Improvements: If you're content with your current residence, consider using your equity to make strategic improvements. Consult with a real estate agent to identify projects that can maximize your home's value when you decide to sell.
- Pursue Personal Goals: Home equity can be a catalyst for achieving personal ambitions, such as starting a business, funding education, or planning for retirement. Responsible use of your equity can make a meaningful impact on your life.
- Mitigate Financial Challenges: Although the quantity of foreclosure filings is currently lower than the usual, there are still homeowners facing foreclosure each year. If you find yourself in a challenging financial situation, a thorough understanding of your available options is crucial. In such circumstances, equity can serve as a protective buffer if you encounter difficulties making timely mortgage payments.
Consult with a Real Estate Professional for a Personalized Assessment
To fully grasp the potential of your home equity and explore the best strategies for your situation, connect with a local real estate agent. They can conduct a professional equity assessment report, guiding you on how to leverage this hidden asset to achieve your goals. Your home is not just a place to live; it's a valuable resource that can shape your financial future.