The Surprising Amount of Home Equity You’ve Gained over the Years

There are a number of reasons you may be thinking about selling your house. And as you weigh your options, you may find you’re unsure how you’re going to deal with one thing about today’s housing market – and that’s affordability. If that’s your biggest concern, understanding how much equity you have in your house could help make your decision that much easier. Here are two key factors that have a big impact on your equity.

How Long You’ve Been in Your Home

First up is homeowner tenure. That’s how long homeowners live in a house, on average, before selling or choosing to move. From 1985 to 2009, the average length of time homeowners stayed put was roughly six years.

But according to the National Association of Realtors (NAR), that number has been climbing. Now, the average tenure is 10 years (see graph below):

Here’s why that’s such a big deal. You gain equity as you pay down your home loan and as home prices climb. And when you combine all of your mortgage payments with how much prices have gone up over the span of 10 years, that adds up. So, if you’ve lived in your house for a while now, you may be sitting on a pile of equity.

How Home Prices Appreciate over Time

To help show how much the price appreciation piece adds up, take a look at this data from the Federal Housing Finance Agency (FHFA) (see graph below):

Here’s what this means for you. While home prices vary by area, the typical homeowner who’s been in their house for five years saw it increase in value by nearly 60%. And the average homeowner who’s owned their home for 30 years saw it more than triple in value in that time.

Whether you’re looking to downsize, relocate to a dream destination, or move so you can live closer to friends or loved ones, your equity can be a game changer.

Bottom Line

Connect with a local real estate agent if you want to find out how much equity you’ve built up over the years and how you can use it to buy your next home.

Carrie Hansen

Carrie loves people and numbers! Carrie has worked in financial services since she graduated from Iowa State with a degree in Finance. She enjoys connecting with new people and developing relationships to foster business and promoting other people. She is an active runner, golfer, enjoys reading, traveling, family, friends, meme sharing, comedy, anything Warren Buffett related and following the markets and investing. Carrie is happiest surrounded by family and dear friends including her boyfriend Mike and his two children most likely laughing or telling stories .

Carrie is also an adult living with Cystic Fibrosis – diagnosed when she was three months old. Cystic fibrosis is a progressive, genetic disease that causes persistent lung infections and limits the ability to breathe over time.

In people with CF, mutations in the cystic fibrosis transmembrane conductance regulator (CFTR) gene cause the CFTR protein to become dysfunctional. When the protein is not working correctly, it’s unable to help move chloride — a component of salt — to the cell surface. Without the chloride to attract water to the cell surface, the mucus in various organs becomes thick and sticky. In the lungs, the mucus clogs the airways and traps germs, like bacteria, leading to infections, inflammation, respiratory failure, and other complications. For every loan I close with Clear Mortgage, I will be donating $200 to the Cystic Fibrosis Foundation, Iowa Chapter. Reach out and apply now!