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For Sellers

Are You Contemplating Selling Your Home? Here’s How Your Equity Can Help



Selling your home might be on your mind, but the current mortgage rates may be giving you pause. Many homeowners are hesitant to sell and potentially take on a higher mortgage rate for their next home. If this dilemma has you concerned, it’s important to understand that while interest rates are currently elevated, so is your home equity. Here’s what you need to know.

What Exactly Is Home Equity and How Does It Grow?

Home equity is the share of your home that you’ve paid off and fully own. It’s the difference between your home’s current market value and the remaining balance on your mortgage. As your home appreciates in value over time and you make mortgage payments that reduce the principal amount owed, your equity stake steadily increases.

In simpler terms, equity is essentially how much your home is worth now, minus the outstanding mortgage balance.

How Much Equity Do Homeowners Currently Possess?

Surprisingly, homeowners have been accumulating equity at a faster pace than they might realize. To put things into perspective, CoreLogic reports that the typical U.S. homeowner now boasts approximately $290,000 in equity. This significant growth can be attributed to the substantial increase in home prices over the past few years. Although the market is showing signs of stabilization, demand for homes still outpaces supply, which is contributing to another round of price hikes.

According to data from the Federal Housing Finance Agency (FHFA), the Census, and property data provider ATTOM, nearly 68.7% of homeowners either have fully paid off their mortgages or have achieved at least 50% equity in their homes.

How Your Equity Can Alleviate Affordability Concerns

Given the current challenges related to affordability, your equity can play a pivotal role when you’re contemplating a move. After selling your current residence, you can leverage the equity you’ve accumulated to facilitate the purchase of your next home. Here’s how it can work to your advantage:

1. Become an All-Cash Buyer: If you’ve been in your current home for an extended period, you may have accumulated enough equity to purchase a new house without the need for a loan. In such a scenario, you can sidestep borrowing money and the associated concerns about fluctuating mortgage rates. The National Association of Realtors (NAR) highlights that these all-cash buyers are happily avoiding the challenges posed by higher mortgage interest rates.

2. Increase Your Down Payment: Your equity can be employed as a substantial down payment on your next home. It could even be substantial enough to allow you to make a larger down payment, reducing the amount you need to borrow and potentially mitigating concerns about today’s interest rates. According to Experian, a larger down payment can lower your principal loan amount and, consequently, your loan-to-value ratio, which may result in more favorable interest rate offers from lenders.

In Conclusion

When considering a move, the equity you’ve accrued can be a game-changer, particularly in the current housing market landscape. To determine the exact amount of equity you have in your current home and explore how it can be used to facilitate your next home purchase, it’s advisable to reach out to a trusted real estate agent.

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For Sellers

When You Sell Your House, Where Do You Plan To Go?



If you’re thinking about selling your house, you may have heard the supply of homes for sale is still low, and that means your house should stand out to buyers who are craving more options. But you may also be wondering, once you sell, how does the current supply impact your own move? And, will you be able to find a home you want to buy with inventory this low?

One thing that can help you find your next home is exploring all your options, including both homes that have been lived in before as well as newly built ones. Let’s look at the benefits of each one.

The Pros of Newly Built Homes

First, let’s look at the advantages of purchasing a newly constructed home. With a brand-new home, you’ll be able to:

  1. Create your perfect home. If you build a home from the ground up, you’ll have the option to select the custom features you want, including appliances, finishes, landscaping, layout, and more.
  2. Cash-in on energy efficiency. When building a home, you can choose energy-efficient options to help lower your utility costs and reduce your carbon footprint.
  3. Minimize the need for repairs. Many builders offer a warranty, so you’ll have peace of mind on unlikely repairs. Plus, you won’t have as many little projects to tackle.
  4. Have brand new everything. Another perk of a new home is that nothing in the house is used. It’s all brand new and uniquely yours from day one.

The Pros of Existing Homes

Now, let’s compare that to the perks that come with buying an existing home. With a pre-existing home, you can:

  1. Explore a wider variety of home styles and floorplans. With decades of homes to choose from, you’ll have a broader range of floorplans and designs available.
  2. Join an established neighborhood. Existing homes give you the option to get to know the neighborhood, community, or traffic patterns before you commit.
  3. Enjoy mature trees and landscaping. Established neighborhoods also have more developed landscaping and trees, which can give you additional privacy and curb appeal.
  4. Appreciate that lived-in charm. The character of older homes is hard to reproduce. If you value timeless craftsmanship or design elements, you may prefer an existing home.

The choice is yours. When you start your search for the perfect home, remember that you can go either route – you just need to decide which features and benefits are most important to you. As an article from The Mortgage Reports says:

“When building, you gain more freedom to tailor the design, materials, and features, but it demands more time and involvement. Conversely, buying an established home offers immediate occupancy . . . yet may require compromises. Your choice should align with your budget, timeline, customization preferences, and the local real estate landscape.”

Either way, working with a local real estate agent throughout the process is mission-critical to your success. They’ll help you explore all of your options based on what matters most to you in your next home. Together, you can find the home that’s right for you.

Bottom Line

If you have questions about the options in your area, connect with a local real estate agent to discuss what’s available and what’s right for you. That way you’ll be ready to make your next move with confidence.

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Buying Myths

Experts Project Home Prices Will Rise over the Next 5 Years



Even with so much data showing home prices are actually rising in most of the country, there are still a lot of people who worry there will be another price crash in the immediate future. In fact, a recent survey from Fannie Mae shows that 23% of consumers think prices will fall over the next 12 months. That’s nearly one in four people who are dealing with that fear – maybe you’re one of them.

To help ease that concern, here’s what the experts say will happen with home prices not just next year, but over the next five years.

Experts Project Ongoing Appreciation

While seeing a small handful of expert opinions may not be enough to change your mind, hopefully, a larger group of experts will reassure you. Here’s that larger group.

The Home Price Expectation Survey (HPES) from Pulsenomics is a great resource to show what experts forecast for home prices over a five-year period. It includes projections from over 100 economists, investment strategists, and housing market analysts. And the results from the latest quarterly release show home prices are expected to go up every year through 2027 (see graph below):


And while the projected increase in 2024 isn’t as large as 2023, remember home price appreciation is cumulative. In other words, if these experts are correct after your home’s value rises by 3.32% this year, it should go up by another 2.17% next year.

If you’re worried home prices are going to fall, here’s the big takeaway. Even though prices vary by local area, experts project they’ll continue to rise across the country for years to come at a pace that’s more normal for the market.

What Does This Mean for You?

If you’re not convinced yet, maybe these numbers will get your attention. They show how a typical home’s value could change over the next few years using the expert projections from the HPES. Check out the graph below:


In this example, let’s say you bought a $400,000 home at the beginning of this year. If you factor in the forecast from the HPES, you could potentially accumulate more than $71,000 in household wealth over the next five years.

Bottom Line

If you’re someone who’s worried home prices are going to fall, rest assured a lot of experts say it’s just the opposite – nationally, home prices will continue to climb not just next year, but for years to come. If you have any questions or concerns about what’s next for home prices in your local area, connect with a real estate agent.

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For Sellers

3 Reasons To Sell Your House Before the New Year [INFOGRAPHIC]



Some Highlights

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The information contained, and the opinions expressed, in these article are not intended to be construed as investment advice. Let's Talk Real Estate and Keeping Current Matters, Inc. do not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Let's Talk Real Estate and Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.