How Home Equity May Help You Buy Your Next Home in Cash

<article class="post-1312429 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-1312429"><span class="entry-date">December 23, 2024</span><div class="entry-header center-block text-center"><h1 class="entry-title">How Home Equity May Help You Buy Your Next Home in Cash</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=How+Home+Equity+May+Help+You+Buy+Your+Next+Home+in+Cash&url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fhow-home-equity-may-help-you-buy-your-next-home-in-cash%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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</div></div><div class="post-tax post-category"><span></span><a href="../category/realtor-blog/index.html" rel="tag">Realtor Blog</a></div><div class="post-tax post-post_tag"></div></div><div class="entry-content"><div><img alt="How Home Equity May Help You Buy Your Next Home in Cash Simplifying The Market" decoding="async" loading="lazy" src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20241216/20241223-Image-Header-original.png" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width=""/>
<p>Building equity in your house is one of the biggest financial advantages of homeownership. And right now, homeowners across the country are sitting on <a href="https://www.simplifyingthemarket.com/2024/09/09/the-surprising-amount-of-home-equity-youve-gained-over-the-years/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">record amounts</a> of it.</p>
<p>Here’s a look at how that equity could be a game changer for you, and why it’ll flip your <a href="https://www.inman.com/2024/11/21/heres-how-to-answer-todays-most-pressing-buyer-and-seller-questions/" rel="noopener noreferrer" target="_blank">perspective</a> from “<em>Why would I move right now?</em>” to “<em>Why wouldn’t I?</em>”</p>
<h4><strong>Home Equity: What Is It?</strong></h4>
<p><a href="https://www.simplifyingthemarket.com/2024/10/07/nows-the-time-to-upgrade-to-your-dream-home/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">Home equity</a> is the difference between how much your house is worth and how much you still owe on your mortgage. For example, if your house is valued at $400,000 and you only owe $200,000 on your mortgage, your equity would be $200,000.</p>
<h4><strong>Why Equity Is Such a Big Deal for Homeowners Looking To Sell</strong></h4>
<p>Recent data from the <a href="https://data.census.gov/cedsci/all?q=mortgage" rel="noopener noreferrer" target="_blank"><em>Census</em></a> and <a href="https://www.attomdata.com/news/most-recent/q2-2024-home-equity-and-underwater-report/" rel="noopener noreferrer" target="_blank"><em>ATTOM</em></a> shows how significant today’s home equity really is. In fact, more than two out of three homeowners have either completely paid off their mortgages (<em>shown in green in the chart below</em>) or have at least 50% equity in their homes (<em>shown in blue in the chart below</em>):</p>
<p><a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20241216/20241223-Over-2-3-of-Americans-Have-Paid-Off-Their-Mortgage-or-Have-at-Least-50-Percent-Equity-original.png" rel="noopener noreferrer" target="_blank"><img alt="a pie chart with text" decoding="async" src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20241216/20241223-Over-2-3-of-Americans-Have-Paid-Off-Their-Mortgage-or-Have-at-Least-50-Percent-Equity-original.png"/></a>And that’s a big deal. Think about it: 2 out of 3 homeowners have at least 50% equity in their homes. To put a more tangible number on it so you can think about what that really means for someone like you, <em>CoreLogic</em> shows the average homeowner has <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights-q3-2024/" rel="noopener noreferrer" target="_blank">$311,000</a> worth of equity built up. That kind of net worth can go a long way if you’re trying to make a move.</p>
<p>And that’s part of the reason why the share of all-cash buyers recently reached a new high. According to an <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" rel="noopener noreferrer" target="_blank">annual report</a> from the <em>National Association of Realtors</em> (NAR), 26% of buyers were able to buy without a mortgage (<em>see graph below</em>):</p>
<p><a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20241216/20241223-The-Share-of-All-Cash-Buyers-Reaches-New-High-original.png" rel="noopener noreferrer" target="_blank"><img alt="a graph with numbers and lines" decoding="async" src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20241216/20241223-The-Share-of-All-Cash-Buyers-Reaches-New-High-original.png"/></a>Imagine buying your next house in cash. No mortgage. No monthly payment. No interest rate to mess with. If you want to find out how much equity you have to see if that’s an option for you, connect with a real estate agent and ask for a professional equity assessment report (PEAR).</p>
<p>Who knows, you may find out you have enough equity to buy your next place outright– and with today’s mortgage rates, not having to take out a home loan is pretty incredible. Even if you don’t have enough equity to buy in all cash, you may still have enough to make a larger <a href="https://www.simplifyingthemarket.com/2024/10/16/the-benefits-of-using-your-equity-to-make-a-bigger-down-payment/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">down payment</a>, which has its own benefits too.</p>
<h3>Bottom Line</h3>
<p>Homeowners have an incredible amount of equity today – and that’s why the share of all-cash buyers is on the rise. To see how much equity you have and talk through how it can help fuel your next move, connect with an agent.</p>
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