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 HomeFirst 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 TimeTo 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 LineConnect 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.

Early Forecasts for the 2025 Housing Market Infographic

Some HighlightsThinking about making a move in 2025 and wondering what you can expect? Here’s what expert forecasts say lies ahead.Mortgage rates will come down slightly. More homes will sell. And prices will rise more moderately. Connect with a local agent to discuss what these forecasts mean for your move and what to expect from your local market in 2025.

The Latest on the Luxury Home Market

Luxury living is about more than just stunning views and cutting-edge smart home technology—it's about elevating your lifestyle. And if you're in the market for a million-dollar home, now is an excellent time to explore the thriving luxury market. Here's why.The Number of Luxury Homes Is GrowingThe top of the market, or luxury homes, can mean different things depending on where you live. But in general, these are homes that are in the top 5% price range in any area. According to a recent report from Redfin, the average value of those homes has risen to over one million dollars:“The median sale price for U.S. luxury homes, defined as the top 5% of listings, rose 9% year-over-year to a record $1.18 million during the second quarter.”That same report goes on to show the percentage of homes valued at a million dollars or more has risen to an all-time high (see graph below):That means, if this is your desired price range, you have options to choose from, each with different features and styles.Whether you're looking for the latest designs, like modern kitchens with high-end appliances, exclusive amenities, or enhanced privacy and security, the market that fits this lifestyle is growing.Your Luxury Home Is an InvestmentIn addition, a luxury home could help you build significant long-term wealth. As the Redfin quote mentioned earlier says, luxury home prices are rising. That may be the reason there are a lot of people investing in luxury real estate right now. According to the August Luxury Market Report:“By the end of July, the overall growth in the volume of sales in 2024 stood at 14.82% for single-family homes and 11.35% for attached homes compared to the same period in 2023.”Bottom LineWith more million-dollar homes on the market and prices going up, you have luxury options to choose from and a chance to build significant long-term wealth. Want to see the best homes in your area? Get in touch with a local real estate agent today.

How the Federal Reserve’s Next Move Could Impact the Housing Market

Now that it’s September, all eyes are on the Federal Reserve (the Fed). The overwhelming expectation is that they’ll cut the Federal Funds Rate at their upcoming meeting, driven primarily by recent signs that inflation is cooling, and the job market is slowing down. Mark Zandi, Chief Economist at Moody’s Analytics, said:“They’re ready to cut, just as long as we don’t get an inflation surprise between now and September, which we won’t.”But what does this mean for the housing market, and more importantly, for you as a potential homebuyer or seller?Why a Federal Funds Rate Cut MattersThe Federal Funds Rate is one of the key factors that influences mortgage rates – things like the economy, geopolitical uncertainty, and more also have an impact.When the Fed cuts the Federal Funds Rate, it signals what’s happening in the broader economy, and mortgage rates tend to respond. While a single rate cut might not lead to a dramatic drop in mortgage rates, it could contribute to the gradual decline that’s already happening.As Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), points out:“Once the Fed kicks off a rate-cutting cycle, we do expect that mortgage rates will move somewhat lower.”And any upcoming Federal Funds Rate cut likely won’t be a one-time event. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:“Generally, the rate-cutting cycle is not one-and-done. Six to eight rounds of rate cuts all through 2025 look likely.”The Projected Impact on Mortgage RatesHere’s what experts in the industry project for mortgage rates through 2025. One contributing factor to this ongoing gradual decline is the anticipated cuts from the Fed. The graph below shows the latest forecasts from Fannie Mae, MBA, NAR, and Wells Fargo (see graph below):So, with recent improvements in inflation and signs of a cooling job market, a Federal Funds Rate cut is likely to lead to a moderate decline in mortgage rates (shown in the dotted lines). Here are two big reasons why that’s good news for both buyers and sellers:1. It Helps Alleviate the Lock-In EffectFor current homeowners, lower mortgage rates could help ease the lock-in effect. That’s where people feel stuck within their current home because today’s rates are higher than what they locked in when they bought their current house.If the fear of losing your low-rate mortgage and facing higher costs has kept you out of the market, a slight reduction in rates could make selling a bit more attractive again. However, this isn’t expected to bring a flood of sellers to the market, as many homeowners may still be cautious about giving up their existing mortgage rate.2. It Should Boost Buyer ActivityFor potential homebuyers, any drop in mortgage rates will provide a more inviting housing market. Lower mortgage rates can reduce the overall cost of homeownership, making it more feasible for you if you’ve been waiting to make a move.What Should You Do?While a Federal Funds Rate cut is not expected to lead to drastically lower mortgage rates, it will likely contribute to the gradual decrease that’s already happening.And while the anticipated rate cut represents a positive shift for the future of the housing market, it’s important to consider your options right now. Jacob Channel, Senior Economist at LendingTree, sums it up well:“Timing the market is basically impossible. If you’re always waiting for perfect market conditions, you’re going to be waiting forever. Buy now only if it’s a good idea for you.”Bottom LineThe expected Federal Funds Rate cut, driven by improving inflation and slower job growth, is likely to have a positive, albeit gradual, impact on mortgage rates. That could help unlock opportunities for you. When you’re ready, connect with a local real estate agent so you’re prepared to take action.