How Much is Your Home Really Worth? You Might Be Surprised!
Let’s talk about something you might not check as often as your bank balance—your home’s value. But when it comes to your financial picture, knowing this number is just as important. When was the last time an expert helped you assess the true worth of your home?
Think about it. For many people, their home is likely the biggest asset they own. If you’ve had your home for a few years (or longer), chances are it’s been steadily growing in value—quietly adding to your wealth behind the scenes. And honestly? You might be surprised by how much.
What is Home Equity?
This wealth you may not even realize you have comes in the form of home equity. Home equity is the difference between what your home is worth and what you still owe on your mortgage. It grows over time as home values rise and as you pay off your mortgage each month. Let’s break it down with an example.
Imagine your home is now worth $500,000, and you have $200,000 left to pay on your loan. That means you have $300,000 in equity. Many homeowners right now are sitting on some pretty significant equity.
In fact, according to CoreLogic (now Cotality), the average homeowner with a mortgage has about $311,000 in equity.
Why You Probably Have More Than You Think
There are two main reasons why homeowners like you have record amounts of equity right now:
- Surging Home Prices
According to the Federal Housing Finance Agency (FHFA), home prices have jumped by more than 57% nationwide over the last five years. If you bought your home a few years ago (or longer), that means your house is likely worth much more now thanks to this significant price increase. - People Are Staying in Their Homes Longer
Data from the National Association of Realtors (NAR) shows that the average homeowner now stays in their home for about ten years. That’s longer than in the past, and over that decade, you’ve been building equity just by making mortgage payments and benefiting from rising home values.
Here’s how this long-term growth in value has benefited you: According to NAR, over the past ten years, the typical homeowner has accumulated $201,600 in wealth just from price appreciation.
What Can You Do with That Equity?
Remember, your home is likely your largest financial asset. And if you’re smart about leveraging your equity, it could unlock exciting possibilities for your future.
- Use it to buy your next home. Your equity could be the down payment you need for your next house. In some cases, it might even mean you can buy your next home in cash!
- Renovate your current home. If your home no longer fits your needs, you can tap into your equity to make upgrades. If you plan to sell later, some of these improvements may even increase your home’s value.
- Start the business of your dreams. Your equity could provide the capital you need for startup costs, equipment, or marketing. This could boost your income potential and create additional wealth for you.
Bottom Line
Chances are, your home is worth a lot more than you think. Whether you’re considering selling, updating, or just want to explore your options, your home equity is more than just a number—it’s a powerful tool.
So, if you sold your home and had significant equity to work with, what would you do with it? Reach out to an agent to see how you can turn your home’s value into your next big move.