Some Highlights

• Thanks to recent home price appreciation, homeowners have near record amounts of equity – and you may too. On average, homeowners have $311K worth of equity.
• Once you sell, you can use it to fund your down payment on your next home or maybe even to buy a smaller house in cash. 
• If you want to find out how much equity you have, connect with an agent. Because it may make a move a lot more feasible than you’d think.​

For a long time, the housing market was all sunshine for sellers. Homes were flying off the shelves, and buyers had to compete like crazy. But lately, things are starting to shift. Some areas are still super competitive for buyers, while others are seeing more homes sit on the market, giving buyers a bit more breathing room.

In other words, it’s a tale of two markets, and knowing which one you’re in makes a huge difference when you move.

What Is a Buyer’s Market vs. a Seller’s Market?

In a buyer’s market, there are a lot of homes for sale, and not as many people buying. With fewer buyers competing for these homes, that means they generally sit on the market longer, they might not sell for as much as they would in a seller’s market, and buyers have more room to negotiate.

On the flip side, in a seller’s market, there aren’t enough homes for sale for the number of buyers who are trying to purchase them. Homes sell faster, sellers often get multiple offers, and prices shoot higher because buyers are willing to pay more to win the home.

The Market Is Starting To Balance Out

For years, almost every market in the country was a strong seller’s market. That made it tough for buyers – especially first-timers. But now, things are shifting. According to Zillow, the national housing market is balancing out (see graph below):

The index used in this graph measures whether the national housing market is more of a seller’s market, buyer’s market, or neutral market – basically, whether it favors buyers, sellers, or if it’s not really swinging either way. Each month, the market is measured between 0 and 100. The closer to 100, the bigger the advantage sellers have.

The orange bars in the middle of the graph show the years when sellers had their strongest advantage, from 2020 to early 2022. But, as time has gone on, the market has become more balanced. It shifted from a strong seller’s market to a less intense one. And lately, it’s been neutral more than anything else (that’s the gray bars on the right side of the graph). That means buyers are gaining some negotiating power again.

In a more balanced or neutral market, homes tend to stay on the market a little longer, bidding wars are less common, and sellers may need to make more concessions – like price reductions or helping with closing costs. That shift gives today’s buyers more opportunities and less competition than a couple of years ago.

Why Are Things Changing?

Inventory plays a big role. When there are more homes for sale, buyers have more options – and that cools down home price growth. As data from Realtor.com shows, the supply of available homes for sale isn’t growing at the same rate everywhere (see graph below):

This graph shows how inventory has changed compared to last year (blue bars) and compared to 2017–2019 (red bars) in different regions of the country.

The South and West regions of the U.S. have seen big jumps in housing inventory in the past year (that’s the blue on the right). Both are almost back to pre-pandemic levels. That’s why more buyer’s markets are popping up there.

But in the Northeast and Midwest, inventory is still very low compared to pre-pandemic (that’s why those red bars are so big). That means those areas are more likely to stay seller’s markets for now.

What This Means for You

Every local market is different. Even if the national headlines say one thing, your town (or even your neighborhood) could be telling a totally different story.

Knowing which type of market you’re in helps you make smarter decisions for your move. That’s why working with a local real estate agent is so important right now.

As Zillow says:

“Agents are experts on their local markets and can craft buying or selling strategies tailored to local market conditions.”

Agents understand the unique trends in your area and can help you make the best choices, whether you’re buying or selling. With their expert strategies, you can move no matter which way the market is leaning, because they know how to navigate various levels of buyer competition, how to find hidden gems locally, how to price a house right, how to negotiate based on who has more leverage, and more.

Bottom Line

If you’re ready to make a move, or even just thinking about it, connect with a local real estate agent. They’d love to help you understand your local market and create a game plan that works for you.

What’s one thing you’re curious about when it comes to the market in your area?

Let’s talk about something you might not check nearly as often as your bank account – and that’s how much your home is worth. But when it comes to your financial situation, it’s an important thing to remember. When’s the last time you had a professional show you the value of your home?

Think about it. For most people, your house is probably the biggest asset you have. And if you’ve owned your home for a few years (or longer), chances are it’s been quietly building wealth for you in the background. And honestly? You might be surprised by just 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 house is worth and what you still owe on your mortgage. It grows over time as home values rise and as you pay down your mortgage each month. Here’s an example to help you really understand how this works.

Let’s say your house is now worth $500,000, and you have $200,000 left to pay off on your loan. That means you have $300,000 in equity. And most homeowners are sitting on some pretty significant equity right now.

According to Cotality (formerly CoreLogic), the average homeowner with a mortgage has about $311,000 in equity.

Why You Probably Have More Than You Think

Here are the two main reasons homeowners like you have record amounts of equity right now:

1. Significant Home Price Growth. According to the Federal Housing Finance Agency (FHFA), home prices have jumped by more than 57% nationwide over the last five years (see map below):

And if you purchased your home a few years ago (or more), this means your house is likely worth much more now than when you first bought it, thanks to how much prices have climbed lately.

2. People Are Living in Their Homes Longer. Data from the National Association of Realtors (NAR), shows the average homeowner stays in their home for about 10 years now (see graph below):

That’s longer than it used to be. And over that decade? You’ve built equity just by making your mortgage payments and riding the wave of rising home values.

So, if you’re one of those people who’s been in their home for that long, here’s how much the behind-the-scenes price growth has helped you out. According to NAR:

“Over the past decade, the typical homeowner has accumulated $201,600 in wealth solely from price appreciation.”

What Could You Actually Do with That Equity?

Remember, your house might be your biggest financial asset – and, if you’re smart about how you leverage your equity, it could open up some exciting opportunities for your future.

• Use it to help buy your next home. Your equity could help you cover the down payment on your next home. In some cases, it might even mean you can buy your next house in all cash.
• Renovate your current house to better suit your life now. And, if you’re strategic about your projects, they could add even more value to your home if you do sell later on.
• Start the business you’ve always dreamed of. Your equity could be exactly what you need for startup costs, equipment, or marketing. And that could help increase your earning potential, so you’re getting yet another financial boost.

Bottom Line

Chances are, your house is worth a lot more than you realize. Whether you’re thinking about selling, upgrading, or simply want to understand your options, your equity isn’t just a number. It’s a tool.

If you sold your house and had significant equity to work with, what would you do with it? Connect with an agent to figure out how to turn your home’s value into your next big move.