Using Home Equity to Purchase Your Next Home in Cash

Building equity in your home is one of the greatest financial benefits of homeownership. Today, homeowners nationwide are enjoying record levels of equity.

Here’s how that equity can be a game changer for you, potentially shifting your mindset from “Why move now?” to “Why wouldn’t I?”

What Is Home Equity?

Home equity is the difference between your home’s current market value and the amount you still owe on your mortgage. For instance, if your home is worth $400,000 and you owe $200,000, your equity is $200,000.

Why Equity Matters for Sellers

Recent reports from the Census Bureau and ATTOM highlight just how significant today’s home equity levels are. More than two-thirds of homeowners have either fully paid off their mortgages (represented in green below) or have over 50% equity in their homes (represented in blue below):

That’s a significant advantage. Consider this: 2 out of 3 homeowners have at least 50% equity in their homes. To make it even clearer, CoreLogic reports that the average homeowner has built up $311,000 in equity. That kind of financial cushion can be a game-changer if you’re considering a move.

It’s also one of the reasons the percentage of all-cash buyers has recently hit a record high. According to an annual report from the National Association of Realtors (NAR), 26% of buyers were able to purchase a home without needing a mortgage (see graph below):

Imagine purchasing your next home with cash—no mortgage, no monthly payments, and no interest rates to worry about. Curious if this could be an option for you? Connect with a real estate agent to request a Professional Equity Assessment Report (PEAR) and discover how much equity you’ve built.

You might be surprised to learn you have enough equity to buy your next home outright. In today’s market, avoiding a mortgage is a major advantage. Even if full cash isn’t an option, your equity could still allow for a larger down payment, which comes with its own set of benefits.

Bottom Line

Homeowners today are benefiting from an unprecedented amount of equity, which is one of the key reasons the share of all-cash buyers continues to grow. This equity could open doors to opportunities you may not have realized were possible, whether it’s purchasing your next home outright, making a substantial down payment, or achieving other financial goals.

If you’re curious about how much equity you’ve built and how it could help fuel your next move, connecting with a trusted real estate agent is a great place to start. They can provide a detailed assessment of your equity and guide you through the options available, ensuring you make the most informed decisions for your future.