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 Home First 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 Time To 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 Line If you're curious about how much equity you’ve gained over the years and how you can leverage it to buy your next home, let's connect. As your local expert Realtor in Iowa, I, Beth Van Zee, am here to guide you through the process and ensure you make the most informed decisions.

The Luxury Home Market: A Growing Opportunity for Investment

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 Growing The 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 Investment In 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 Line With 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 our area? Let’s get in touch today. Beth Van Zee, your trusted Realtor in Iowa.

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

As September unfolds, all eyes are on the Federal Reserve (the Fed) and their upcoming decisions. The expectation is that they’ll cut the Federal Funds Rate at their next meeting, driven by signs that inflation is cooling and the job market is slowing. Mark Zandi, Chief Economist at Moody’s Analytics, notes: “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 how could this decision affect the housing market, and more importantly, what does it mean for you as a potential homebuyer or seller? Why a Federal Funds Rate Cut Matters The Federal Funds Rate is a key factor that influences mortgage rates, along with other elements like the economy and geopolitical uncertainty. When the Fed cuts the Federal Funds Rate, it signals changes in the broader economy, and mortgage rates often respond. While a single rate cut might not lead to a dramatic drop in mortgage rates, it could contribute to the ongoing gradual decline we’ve been seeing. Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), explains: “Once the Fed kicks off a rate-cutting cycle, we do expect that mortgage rates will move somewhat lower.” This likely won’t be a one-time event. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), predicts: “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 Rates Here’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 Effect For current homeowners, lower mortgage rates could ease the lock-in effect. This is where homeowners feel stuck because today’s rates are higher than what they locked in when they bought their current house. If you’ve been hesitant to sell because of higher rates, a slight reduction could make selling more attractive. However, many homeowners might still be cautious about giving up their existing mortgage rate. 2. It Should Boost Buyer Activity For 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 Line The expected Federal Funds Rate cut, driven by improving inflation and slower job growth, is likely to have a gradual, positive impact on mortgage rates. This could unlock opportunities for you. When you’re ready, let’s connect to ensure you’re prepared to take action when the time is right for you. Contact Beth Van Zee, your trusted Realtor in Iowa.

Should You Sell Now? The Lifestyle Factors That Could Tip the Scale

Are you on the fence about whether to sell your house now or hold off? It’s a common dilemma, but here’s a key point to consider: your lifestyle might be the biggest factor in your decision. While financial aspects are important, sometimes the personal motivations for moving are reason enough to make the leap sooner rather than later. An annual report from the National Association of Realtors (NAR) offers insight into why homeowners like you chose to sell. All of the top reasons are related to life changes. As the graph below highlights: As the visual shows, the biggest motivators were the desire to be closer to friends or family, outgrowing their current house, or experiencing a significant life change like getting married or having a baby. The need to downsize or relocate for work also made the list. If you, like the homeowners in this report, find yourself needing features, space, or amenities your current home just can’t provide, it may be time to consider talking to Beth Van Zee, a trusted Realtor in Iowa, about selling your house. Your needs matter. Beth will walk you through your options and what you can expect from today’s market, so you can make a confident decision based on what matters most to you and your loved ones. Beth will also be able to help you understand how much equity you have and how it can make moving to meet your changing needs that much easier. As Danielle Hale, Chief Economist at Realtor.com, explains: “A consideration today's homeowners should review is what their home equity picture looks like. With the typical home listing price up 40% from just five years ago, many home sellers are sitting on a healthy equity cushion. This means they are likely to walk away from a home sale with proceeds that they can use to offset the amount of borrowing needed for their next home purchase.” Bottom Line Your lifestyle needs may be enough to motivate you to make a change. If you want help weighing the pros and cons of selling your house, let’s have a conversation. Reach out to Beth Van Zee, your local expert Realtor in Iowa, and start planning your next steps today.