When was the last time you had a professional evaluate the value of your Triangle Area home? If it’s been a while, you might be missing out on some important insights about your home equity.
Your home is likely your largest financial asset. And if you’ve lived there for a few years or more, it’s probably been building home equity for you behind the scenes, whether you’ve been tracking it or not. With shifting market conditions, you may be surprised by just how much your Raleigh home value has increased.
What Is Home Equity?
The wealth you’ve accumulated in your home is called equity. It’s the difference between your home’s current value and what you still owe on your mortgage. As you pay down your loan and property values rise, that equity grows.
Here’s a quick example: if your home is worth $500,000 and your remaining loan balance is $200,000, your equity is $300,000. That’s right in line with the national average. According to Cotality, homeowners with a mortgage have roughly $302,000 in equity today.
Why You Probably Have More Home Equity Than You Think
Two key factors are contributing to high equity levels for many homeowners:
1. Rising Home Prices: The Federal Housing Finance Agency (FHFA) reports that home prices have increased nearly 54% nationwide over the past five years. That means your property has likely appreciated significantly since you bought it. Even if prices have recently stabilized or dipped slightly, long-term gains still benefit most homeowners. (see map below):
2. Longer Homeownership: According to the National Association of Realtors (NAR), the average homeowner stays in their home for about 10 years. (see graph below):
Over that time, regular mortgage payments and appreciation add up, helping you grow your wealth steadily over the years. NAR notes:
Over the past decade, the typical homeowner has accumulated $201,600 in wealth solely from price appreciation.”
What Could You Actually Do with That Home Equity?
Your equity isn’t just a number; it’s a powerful financial resource. Depending on your goals, it could be the key to your next chapter. Here’s how:
- Buy Your Next Home: Your equity might help cover the down payment on a new place in the Triangle or even allow you to buy it outright in cash.
- Renovate: Use your equity to fund home improvements that make your space more functional now and potentially more valuable later.
- Pursue a Dream: Whether you’ve been thinking about starting a business, investing in something new, or paying for education, equity can help make it happen.
Bottom Line
Chances are, your Triangle Area home is worth more than you think. If you’re curious about your current equity, contact Linda Craft Team Realtors. We’ll provide a professional equity assessment report so you can see where you stand and what opportunities might be waiting for you.