How to unlock your equity in a changing housing market
This article talks about housing market trends and how to unlock your home equity in exchange for cash. Home values have been rising dramatically over the past two years. In a recent survey, 71% of respondents agreed that there was never a better time to purchase a home than the last couple of years. National home values were up 18% year-over-year at the end of 2021. The average homeowner is sitting on approximately $178,000 in home equity. According to the Federal Reserve, the nationwide total home equity is estimated at $25.3 trillion as of the fall of 2021.
Interest rates are now on the rise. Homeowners who purchased or refinanced homes while mortgage rates were at record lows were likely able to both lock in a great rate and ride the wave of home appreciation as the housing market took off in 2021. However, taking advantage of one's home equity in the form of cash is becoming more difficult with interest rate hikes coming to combat inflation.
With home values at an all-time high and rising, there’s never been a better time to consider using your home equity for a home improvement or debt consolidation. While there may be scenarios that a cash-out refinance could benefit you, it’s best to look at the numbers and understand the long-term costs associated with each option.
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