For homeowners, the decision to sell your house can be a tough one, especially given the current real estate landscape. Perhaps you're concerned about taking on a higher mortgage rate for your next property. If this is your primary concern, understanding your equity could be the key to bolstering your confidence and facilitating your transition.

What Equity Is and How It Works

Equity is essentially your home's present value minus the outstanding loan balance. Recent trends have shown that equity is growing at a surprisingly rapid pace.

Over the past years, housing prices have experienced substantial growth, propelling your equity to new heights at an accelerated rate. Although the market is gradually stabilizing, a noticeable disparity persists between available homes for sale and eager buyers. This demand-supply imbalance is fueling a resurgence in home prices. Rob Barber, CEO of ATTOM, a leading property data provider, clarifies:

“Equity levels were high even during the recent downturn, and now they are going back up and better than ever.”

How Equity Benefits You in Today’s Market

Capitalizing on Equity in Today's Real Estate Landscape In the current affordability landscape, equity can serve as a significant advantage during your relocation. Here's why: According to insights from ATTOM and the Census, almost two-thirds (68.7%) of homeowners have either cleared their mortgages or possess at least 50% equity (refer to the chart below):

That means roughly 70% have a tremendous amount of equity right now.

Upon selling your property, you can channel your equity towards facilitating your next property purchase. It might cover a portion or even the entirety of your upcoming down payment. In some cases, it could enable a substantially larger down payment, reducing the need for extensive financing. If you've occupied your current residence for a prolonged period, your accumulated equity might even allow you to make an all-cash payment. In doing so, you'd circumvent borrowing entirely and sidestep concerns about prevailing mortgage rates.

How To Find Out How Much Equity You Have

The best way to learn how much you have is to reach out to a trusted real estate agent for a Professional Equity Assessment Report (PEAR).

Bottom Line

If you're contemplating a transition, the equity you've accrued can wield a significant influence. To ascertain the extent of your equity in your existing property and how it can propel your next investment, let's establish a connection. Your next real estate move might be more feasible than you imagine, with your equity paving the way for a seamless transition.