Welcome to the Monthly Market Report for December 2024. We want to give you the insights that you need to help confidently make the best decisions when buying and selling a home.
“We are your real estate advisors” – RRG
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How Home Equity May Help You Buy Your Next Home in Cash
Building equity in your house is one of the biggest financial advantages of homeownership. And right now, homeowners across the country are sitting on record amounts of it.
Here’s a look at how that equity could be a game changer for you, and why it’ll flip your perspective from “Why would I move right now?” to “Why wouldn’t I?”
Home Equity: What Is It?
Home equity is the difference between how much your house is worth and how much you still owe on your mortgage. For example, if your house is valued at $400,000 and you only owe $200,000 on your mortgage, your equity would be $200,000.
Why Equity Is Such a Big Deal for Homeowners Looking To Sell
Recent data from the Census and ATTOM shows how significant today’s home equity really is. In fact, more than two out of three homeowners have either completely paid off their mortgages (shown in green in the chart below) or have at least 50% equity in their homes (shown in blue in the chart below):
And that’s a big deal. Think about it: 2 out of 3 homeowners have at least 50% equity in their homes. To put a more tangible number on it so you can think about what that really means for someone like you, CoreLogic shows the average homeowner has $311,000 worth of equity built up. That kind of net worth can go a long way if you’re trying to make a move.
And that’s part of the reason why the share of all-cash buyers recently reached a new high. According to an annual report from the National Association of Realtors (NAR), 26% of buyers were able to buy without a mortgage (see graph below):
Imagine buying your next house in cash. No mortgage. No monthly payment. No interest rate to mess with. If you want to find out how much equity you have to see if that’s an option for you, connect with a real estate agent and ask for a professional equity assessment report (PEAR).
Who knows, you may find out you have enough equity to buy your next place outright– and with today’s mortgage rates, not having to take out a home loan is pretty incredible. Even if you don’t have enough equity to buy in all cash, you may still have enough to make a larger down payment, which has its own benefits too.
Bottom Line
Homeowners have an incredible amount of equity today – and that’s why the share of all-cash buyers is on the rise. To see how much equity you have and talk through how it can help fuel your next move, let’s connect.
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Market Overview
Consumer debt has reached record levels, with mortgage debt being a significant component[1]. However, home equity is outpacing mortgage debt, with the average homeowner having $319,000 of equity, of which $207,000 could be borrowed against while maintaining a 20% equity cushion[1].
Key Indicators
- Foreclosures: Despite a slight monthly increase, foreclosure activity has decreased by 11% year-over-year, with 30,784 properties filing for foreclosure in October 2024[1].
- Days on Market: The median days on market for homes has increased to 58 days in October 2024, up from 43 days in 2021[1].
- Inventory: Active listing count has risen to 953,814 in October 2024, a significant increase from 565,707 in 2021[1].
- Existing Home Sales: The seasonally adjusted annual rate of existing home sales has been declining since 2021[1].
FSBO and Agent-Assisted Sales
For-Sale-by-Owner (FSBO) sales have reached a historical low, accounting for only 6% of all home sales in 2024. Conversely, 90% of sellers used the assistance of a real estate agent, up from 89% the previous year[1].
Mortgage Rates and Projections
Mortgage rates are projected to gradually decrease, with the average 30-year fixed rate expected to be around 6.33% by Q4 2025, according to forecasts from Fannie Mae, MBA, and Wells Fargo[1].
Home Price Forecasts
Various sources project home price appreciation for 2025, ranging from -0.4% to 5.5%, with most forecasts indicating positive growth[1].
Future Outlook
Experts anticipate a modest boost in the housing market due to lower mortgage rates, but the impact may be limited by tight existing inventory and cautious homebuyers. Single-family home construction is expected to increase steadily in 2025, supported by modest declines in financing costs and scarcity of existing homes[1].
Citations:
[1] Noted in the Housing Market Update
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Here’s a few neighborhoods you might find your next home in…
Simi Valley CA, Moorpark CA, Thousand Oaks CA, Westlake Village CA, Agoura CA, Oak Park CA, Calabasas CA, Encino CA, Sherman Oaks CA, Tarzana CA, Woodland Hills CA, Camarillo CA, Oxnard
