The Wealth-Building Power of Homeownership [INFOGRAPHIC]

Some HighlightsIf you’re trying to decide if buying a home is worth it, consider the long-term benefits, like building equity as home values grow over time.According to the FHFA, home values have increased by 315.7% since 1991.Home equity is one reason owning your own place can really pay off in the long run. When you're ready, talk with a local real estate professional.

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Your Equity Could Make a Move Possible

Many San Diego homeowners looking to sell feel like they’re stuck between a rock and a hard place right now. Today’s mortgage rates are higher than the one they currently have on their home, and that’s making it harder to want to sell and make a move. Maybe you’re in the same boat. But what if there was a way to offset these higher borrowing costs? There is. And the money you need probably already exists in your current home in the form of equity. What Is Equity? Think of equity as a simple math equation. Freddie Mac explains: “. . . your home’s equity is the difference between how much your home is worth and how much you owe on your mortgage.” Your equity grows as you pay down your loan over time and as home prices climb. And thanks to the rapid home price appreciation we saw in recent years, you probably have a whole lot more of it than you realize. The latest from the Census and ATTOM shows more than two out of three homeowners have either completely paid off their mortgages (shown in green in the chart below) or have at least 50% equity (shown in blue in the chart below):   That means the majority of San Diego homeowners have a game-changing amount of equity right now. How Your Equity Can Help Fuel Your Move After you sell your house, that equity can help you move without worrying as much about today’s mortgage rates. As Danielle Hale, Chief Economist for Realtor.com says: “A consideration today's homeowners should review is what their home equity picture looks like. With the typical home listing price up 40% from just five years ago, many home sellers are sitting on a healthy equity cushion. This means they are likely to walk away from a home sale with proceeds that they can use to offset the amount of borrowing needed for their next home purchase.” To give you some examples, here are a few ways you can use equity to buy your next San Diego home: Be an all-cash buyer: If you’ve been living in your current home for a long time, you might have enough equity to buy your next home without having to take out a loan. If that’s the case, you won’t need to borrow any money or worry about mortgage rates.  Make a larger down payment: Your equity could also be used toward your next down payment. It might even be enough to let you put a larger amount down, so you won’t have to borrow as much at today’s rates.  The First Step: Determine How Much Equity You Have in Your San Diego Home Want to find out how much equity you have? To do that, you’ll need two things: The current mortgage balance on your home The current value of your home You can probably find the mortgage balance on your monthly mortgage statement. To understand the current market value of your house, you can pay hundreds of dollars for an appraisal, or you can contact a local real estate agent who will be able to present to you, at no charge, a professional equity assessment report (PEAR). Once you’ve connected with a trusted local agent and run the numbers, you’re one step closer to making a move you may not have thought was realistic – all thanks to your equity. Bottom Line If you want to find out how much equity you have and talk more about how it can make your next move possible, connect with a local real estate professional.

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The Sweet Spot for Buying Luxury Homes

If you’ve been looking for a home in San Diego at the high end of your market, but haven’t found the right one, you may have put your search on hold. But according to recent data, now may be the time to jump back in. Here’s why. There Are More Luxury Homes To Choose From What’s considered the top-end of the market, or a luxury home, will always vary by location. But generally speaking, they’re homes that are valued in the top 5% of any given market. According to a recent report from the Institute for Luxury Home Marketing, the selection of luxury homes is increasing (see graph below):   As the graph shows, there are considerably more single-family luxury San Diego homes available now than there were a year ago. In fact, there are even more than there were just a month ago. This means you should have a wider variety of top-of-the-line homes to choose from, each with unique features and styles. Whether you were searching for the latest design elements, like modern kitchens with chef-grade appliances, a breathtaking view, or integrated smart home technology, more luxury inventory means you should have an easier time finding one that matches your taste and lifestyle. Rising Luxury Home Prices Can Help You Build Wealth Another important factor to consider is that luxury home prices are on the rise. According to HousingWire, luxury home prices have increased by 8.7% over the past year. That’s why: “People with the means to buy high-end homes are jumping in now because they feel confident prices will continue to rise . . . They’re ready to buy with more optimism and less apprehension.” This means buying before prices climb higher – and while more inventory is on the market – may be your sweet spot. Because home prices are rising, owning a home could help you build more generational wealth over time. On the other hand, if you wait to buy, you might end up paying more for the same home later on as luxury prices continue to rise. Bottom Line With growing inventory and rising prices, you have a greater selection of luxury homes to choose from and an opportunity in front of you. Want to see the higher-end homes that are available in our area? Connect with a local real estate agent today.

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