How Much Home Equity Have You Gained? The Answer Might Surprise You
Have you ever stopped to think about how much wealth you’ve built up just from being a homeowner? As home values rise, so does your net worth. And, if you’ve been in your house for a few years (or longer), there’s a good chance you’re sitting on a pile of equity — maybe even more than you realize. What Is Home Equity? Home equity is the difference between what your house is worth and what you owe on your mortgage. For example, if your house is worth $500,000 and you still owe $200,000 on your home loan, you have $300,000 in equity. It’s essentially the wealth you’ve built through homeownership. Right now, homeowners across the country are seeing record amounts of equity. According to Intercontinental Exchange (ICE), the average homeowner with a mortgage has $319,000 in home equity. Why Have Homeowners Gained So Much Equity? The rise in home equity over the years can be credited to two key factors: 1. Significant Home Price Growth Home prices have climbed dramatically in recent years. In fact, according to the Federal Housing Finance Agency (FHFA), over the past five years, home prices nationwide have risen by 57.4% (see map below): This appreciation means your house is likely worth much more now than when you first bought it. 2. Longer Tenure in Homes Data from the National Association of Realtors (NAR) shows people are staying in their homes for a decade (see graph below): This increased tenure means homeowners benefit even more from home values growing over time. That’s because the longer someone has lived in their house, the more that home’s value has grown, which directly increases equity. And if you’re one of those people who’s been in their home for 10 years or more, know this – according to NAR: “Over the past decade, the typical homeowner has accumulated $201,600 in wealth solely from price appreciation.” The Benefits of Having Home Equity What does that mean for you? It means your house might be your biggest financial asset — and it could open up some exciting opportunities for your future. Let’s break it down. Moving to Your Next Home Your equity could help you cover the down payment for your next home. In some cases, it might even mean you can buy your next house all cash. Financing Home Improvements Thinking about upgrading your kitchen, adding a home office, or tackling other projects? Your equity can provide the funds to make those improvements happen, increasing your home’s value and making it more enjoyable to live in too. Getting a Business Going If you’ve been dreaming about starting your own business, your equity could be the kickstart you need. Whether it’s for startup costs, equipment, or marketing, leveraging your home’s value can help bring your entrepreneurial goals to life. Bottom Line Whether you’re thinking about selling, upgrading, or simply want to understand your options, your home equity is a powerful resource. If you’re wondering how much equity you’ve built or how you can use it to meet your goals, let’s connect and explore the possibilities. Call or text us at (515) 329-4667 or you can email us at zelda@zealtynow.com.
Housing Market Predictions and Mortgage Rate Projections for 2025
Wondering what’s in store for the housing market this year? And more specifically, what it all means for you if you plan to buy or sell a home? The best way to get that information is to lean on the pros. Experts are constantly updating and revising their forecasts, so here’s the latest on two of the biggest factors expected to shape the year ahead: mortgage rates and home prices. Will Mortgage Rates Come Down? Everyone’s keeping an eye on mortgage rates and waiting for them to come down. So, the question is really: how far and how fast? The good news is they’re projected to ease a bit in 2025. But that doesn’t mean you should expect to see a return of 3-4% mortgage rates. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says: “Are we going to go back to 4%? Per my forecast, unfortunately, we will not. It’s more likely that we’ll go back to 6%.” And the other experts agree. They’re forecasting rates could settle in the mid-to-low 6% range by the end of the year (see chart below): But you should remember, this will continue to change as new information becomes available. Expert forecasts are based on what they know right now. And since everything from inflation to economic drivers have an impact on where rates go from here, some ups and downs are still very likely. So, don’t get caught up in the exact numbers here and try to time the market. Instead, focus on the overall trend and on what you can actually control. A trusted lender and an agent partner will make sure you’ve always got the latest data and the context on what it really means for you and your bottom line. With their help, you’ll see even a small decline can help bring down your future mortgage payment. Will Home Prices Fall? The short answer? Not likely. While mortgage rates are expected to ease, home prices are projected to keep climbing in most areas – just at a slower, more normal pace. If you average the expert forecasts together, you’ll see prices are expected to go up roughly 3% next year, with most of them hitting somewhere in the 3 to 4% range. And that’s a much more typical and sustainable rise in prices (see graph below): So don’t expect a sudden drop that’ll score you a big deal if you’re thinking of buying this year. While that may sound disappointing if you’re hoping prices will come down, refocus on this. It means you won’t have to deal with the steep increases we saw in recent years, and you’ll also likely see any home you do buy go up in value after you get the keys in hand. And that’s actually a good thing. And if you’re wondering how it’s even possible prices are still rising, here’s your answer. It all comes down to supply and demand. Even though there are more homes for sale now than there were a year ago, it’s still not enough to keep up with all the buyers out there. As Redfin explains: “Prices will rise at a pace similar to that of the second half of 2024 because we don’t expect there to be enough new inventory to meet demand.” Keep in mind, though, the housing market is hyper-local. So, this will vary by area. Some markets will see even higher prices. And some may see prices level off or even dip a little if inventory is up in that area. In most places though, prices will continue to rise (as they usually do). If you want to find out what’s happening where you live, you need to lean on an agent who can explain the latest trends and what they mean for your plans. Bottom Line The housing market is always shifting, and 2025 will be no different. With rates likely to ease a bit and prices rising at a more normal and sustainable pace, it’s all about staying informed and making a plan that works for you. Let’s connect so you can get the scoop on what’s happening in our area and advice on how to make your next move a smart one. Give us a call at (515) 329-4667 or email us at zelda@zealtynow.com and we’d be happy to help you find your dream home or put together a plan to help you sell your home.
Simple Steps To Help You Save for Your First Home
Turning a dream into reality starts with one thing: a plan. And if buying your first home is on your list of goals, now’s the perfect time to put a plan in motion to help you save. And the best part? Reaching your savings goal doesn’t mean making huge sacrifices overnight – small, consistent steps can get you there over time. Here are a few strategies that can help speed up the process. Step 1: Build a Budget That Works for You Knowing where your money’s going is the first step to saving more of it. Take some time to track the money you’ve got coming in and going out. This helps you spot areas where you're spending more than you realize. It also helps to give yourself some guidelines on what you want to spend for groceries, gas, and more – try to stick to whatever caps you put on each spending category. Step 2: Cut Down on Any Extras (It Adds Up) Once you’ve got a clear budget, it’s time to tighten up. Look for areas where you can cut down your costs – like services you don’t really need – or ways you can reduce recurring expenses and put that money in your house fund instead. Every dollar you save now brings you closer to your future house. As Bankrate says: “If you’re saving for a house, cutting back on your spending can help. Start with cutting unnecessary expenses, like subscription services, entertainment, delivery services or eating out. If possible, negotiate down recurring monthly or annual expenses, such as getting a better car insurance rate or reducing an internet bill . . . .” Step 3: Automate Your Savings Consistency is the real game-changer. If you have to transfer money manually, you may forget to do it. That’s why setting up automatic transfers to a dedicated savings account makes it easier to save regularly. Even apps that round up purchases to the nearest dollar and save the difference can help you build momentum without effort. As an article from Forbes explains: “Automating your savings helps to keep your progress toward your goal consistent. Set up automatic transfers from your checking account to a dedicated savings account. This will help you prioritize saving and minimize the chances of spending your money on other things.” Step Four: Put Any Extra Money To Work Got a tax refund, work bonus, or a cash gift? Don’t fall into the temptation to spend it on something you don’t actually need. Use those unexpected boosts to make big strides toward your savings goal. Treating this extra cash as an opportunity, not just a nice surprise, will help you get there faster. Bottom Line Saving for your first house isn’t about perfection – it’s about progress. A solid plan, a little discipline, and a clear goal will take you further than you think. If you’re ready to make homeownership happen, let’s connect. Call us today at (515) 329-4667 and we’ll map out the next steps together to get you closer to the keys to your first home.
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