Building Home Equity: Why Every Second Counts in Today’s Market

The search for a dream home can often feel like a race against the clock, especially in a market where demand outstrips supply. For many, the journey to homeownership begins with a wishlist of features: a welcoming neighborhood, ample space for family, and a layout that sings to their heart. But there’s an aspect of home purchasing that goes beyond the tangible—a financial benefit that grows over time, often without us even noticing. It’s called home equity.

Understanding Home Equity Home equity is the portion of your property that you truly "own." It's the market value of your property minus any mortgage or loan balances you have. As you pay off your mortgage and as the value of your home appreciates, your equity increases—a form of saving that can significantly impact your financial health.

The visual data I've shared (attached/above/below) paints a clear picture: homeownership can equate to substantial equity gains over time. Let’s break it down:

  • 10-Year Growth: A home bought for $350K in December 2013 is now worth approximately $711K. That’s a staggering 103% increase in equity.
  • 5-Year Growth: Similarly, a home purchased for the same price in December 2018 has jumped in value by 54%, now standing at $539K.
  • 1-Year Growth: Even over the span of just one year, from December 2022, there's a noticeable 7% equity gain, with the property value increasing to $375K.

These figures are more than just numbers; they’re a testament to the enduring value of real estate investment.

Why Pre-Approval Matters In a bustling market, being pre-approved for a mortgage is akin to standing at the starting line with your sneakers tied tight and a clear path ahead. It not only shows sellers that you are serious and ready to buy, but it also gives you a speed advantage to act quickly when you find the right home.

Here’s why getting pre-approved should be your first step:

  1. Speed: Pre-approval accelerates the buying process. With financial assessments already in hand, you can make an offer swiftly, sometimes on the spot.
  2. Budgeting: Knowing how much the bank is willing to lend you helps to narrow down your search to homes within your financial reach.
  3. Competitive Edge: In multiple-offer situations, sellers are more likely to consider buyers who have secured pre-approval as it suggests a lower risk of the deal falling through.
  4. Rate Lock: In some cases, you can lock in an interest rate, protecting you from market fluctuations while you search for your home.

Final Thoughts While the excitement of house-hunting is undeniable, the real thrill lies in the equity you build with every mortgage payment, with every year that passes. And while the market waits for no one, with pre-approval, you’re not just waiting for your dream home—you’re ready to claim it.

Want to learn more about how to leverage the potential of your future home’s equity? Or how to get a head start with a pre-approval? Drop me a message and let's discuss how you can secure your slice of the real estate pie.

Make sure to follow our social media channels to stay up to speed on more informative real estate postings, and if you have any questions, please don't hesitate to contact us!

For all of your real estate needs, Move with Megan!

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