There are many reasons you might be considering selling your home. As you explore your options, one question may come to mind: how will you navigate the current housing market, especially when it comes to affordability? If that’s a concern for you, taking a closer look at how much equity you’ve built over the years could make your decision easier. Two important factors significantly influence your home equity:
1. How Long You’ve Owned Your Home
The length of time you’ve spent in your home, known as homeowner tenure, plays a major role in building equity. From 1985 to 2009, the average homeowner stayed in one place for around six years.
However, according to data from the National Association of Realtors (NAR), that number has been on the rise. Today, the average homeowner stays in their home for about 10 years (see graph below):
Why This Matters
Your home equity grows in two key ways: as you make mortgage payments and as home prices increase over time. When you combine years of paying down your loan with the steady rise in property values, the result can be substantial. If you’ve owned your home for a significant period, you could be sitting on a considerable amount of equity.
Home Price Appreciation Over Time
To illustrate the impact of price appreciation, take a look at this data from the Federal Housing Finance Agency (FHFA) (see graph below):
What This Means for You
While home prices vary by location, the typical homeowner who’s owned their home for five years has seen its value rise by nearly 60%. For those who’ve been in their homes for 30 years, property values have more than tripled.
Whether you’re considering downsizing, relocating to your dream spot, or moving closer to family and friends, the equity you’ve built can make a significant difference in your next move.
Bottom Line
If you’re curious about how much equity you’ve accumulated and how it can help you purchase your next home, let’s connect.
