Equity in homeownership has increased by 32% since 2021 - to a whopping total of $3.8 trillion collectively. On average, each borrower saw equity growth of $63,600.
The number of "upside down" mortgages, or mortgages that exceed what the property is worth, fell 23% to just 2.6%.
What is home equity -
If you own a home, you likely have money on the table at your disposal...
Equity is the difference between the amount you owe on your home and your home's current market value. It can either be positive or negative, and is subject to change depending on the housing market. Our current market has caused record-high price increases, driven by housing shortages and a lack of inventory. While this creates some challenges for homebuyers, the increase in home values can directly benefit home sellers. If you've purchased a home in the last few years, you've likely already built some equity.
What can I do with the equity in my home -
1. Use a home equity loan or a home equity line of credit (HELOC)
I know the importance of staying in my lane (which is helping my clients buy and sell their homes) so I'll keep this brief and refer you to an outstanding lender for more information - but a home equity loan or a home equity line of credit can give you access of up to 80-85% of your home's value as a lump-sum payment or as a line of credit. I imagine this is what Scrooge McDuck did to fill his swimming pool vault with coin. In some cases you can use this money to make improvements or repairs to your home, paying off debt, starting a business, etc. - the options are infinite depending on the program.
2. Use your home equity as a down payment on a new home
The equity you have accumulated through years (or in today's climate, a year +) of homeownership can be used when you purchase your next home. You can sell your home and purchase another simultaneously, and use the proceeds of your home sale as downpayment. Whether you're "trading up" and purchasing a home with more amenities, or purchasing a less expensive home to lower your mortgage payment/total amount owed - there are plenty of options for you.
3. Sell your home and return to renting
That's it. I said the R word. RENTING. I'm a REALTOR®, which people interpret as 'commission sales lady think rent bad idea' - but there's a chair for every butt. Renting vs. owning does have its clear advantages. You don't have the headache of maintaining a home or a yard, or have to deal with costly home repairs. Others want the flexibility to move whenever they want, without being tethered to property ownership. If you sell your home and return to renting, you can cash out and use your gained equity however you want. 
The Bottom Line -
There are some obvious advantages to using the home equity in your home - you can use the money for almost any purpose and it affords you the flexibility to really make some financial strides. Some of the drawbacks include setting you back on your path to outright homeownership, and qualification depends entirely on market conditions. If you're not sure how much equity you have in your home or how it can work for you, call me. You should work with a real estate agent who fully understands the current market conditions and how to use it to your advantage. Your home selling experience in Northeast Wisconsin should be overwhelmingly positive and painless, and it starts with working with the best.
