There are many reasons you might be considering selling your home. As you weigh your options, one major concern could be the affordability of today’s housing market. However, understanding how much equity you’ve built in your home over time could help ease your worries. Two key factors greatly influence your home equity: how long you've lived in your home and how much home prices have appreciated.

How Long You’ve Owned Your Home

The length of time you've lived in your home, known as homeowner tenure, plays a significant role in building equity. Historically, from 1985 to 2009, homeowners stayed in their homes for an average of six years. But that has changed in recent years. According to the National Association of Realtors (NAR), the average tenure is now 10 years:

This extended length of ownership is crucial because it means you've had more time to pay down your mortgage and benefit from rising home prices. The combination of regular mortgage payments and significant price appreciation over a decade can result in substantial equity.

How Home Prices Have Appreciated Over Time

Home price appreciation also plays a huge role in increasing your equity. Data from the Federal Housing Finance Agency (FHFA) shows how much property values have grown over time:

What does this mean for you? While home prices vary depending on location, homeowners who’ve owned their homes for just five years have typically seen their property values increase by nearly 60%. For those who’ve owned their homes for 30 years, their property values may have more than tripled.

Whether you’re thinking about downsizing, relocating, or moving to be closer to family, the equity you’ve built up could provide a significant financial advantage when purchasing your next home.

Bottom Line

The equity you’ve built in your home over the years can be a game changer when it comes to affording your next property. If you’d like to learn how much equity you have and how you can use it to reach your real estate goals, let’s connect today.