Blog Stories One of the Top Reasons to Own a Home

One of the Top Reasons to Own a Home

By Chad Brackett, October 23, 2019

One of the benefits of homeownership is that it is a “forced savings plan.” Here’s how it works: You make a mortgage payment each month. Part of that payment is applied to the principal balance of your mortgage. Each month you owe less on the home. The difference between the value of the home and what you owe is called equity.

If your home has appreciated since the time you purchased it, that increase in value also raises your equity. Over time, the equity in your home could be substantial. Recently, CoreLogic revealed that the average homeowner gained more than $65,000 in equity over the last 5 years.

Unlike the last decade, homeowners are no longer foolishly tapping into that equity. In 2006-2008, many owners used their homes like an ATM by pulling equity out to purchase new cars, jet skis, or lavish vacations. They were pulling out cash (equity) from an appreciating asset, and then spending it on rapidly depreciating items. That is not happening anymore.

Over 50% of Homes Have at Least 50% Equity

The number of homeowners that currently have at least 50% equity in their home is astonishing. According to the Urban Institute, 37.1% of all homes in the country are mortgage-free. In a home equity studyATTOM Data Solutions revealed that of the 62.9% of homes with a mortgage, 25.6% have at least 50% equity. That number has been increasing over the last five years:

By doing a little math, we can see that 53.2% of all homes in this country have at least 50% equity right now. Of all homes, 37.1% are mortgage-free and an additional 16.1% with a mortgage have at least 50% equity.

 

Bottom Line

Homeownership is different than renting. When you own, your housing expense (the mortgage payment) comes back to you in the form of equity in your home. That doesn’t happen with your rent payment. Your rent helps build your landlord’s equity instead.

 

Chad Brackett

Earth Advantage & ADU Specialist Broker Licensed in OR & WA

Movin' and shakin'... Do you need to buy? Do you need to sell? Is moving in your future? Then let’s talk. Chad Brackett is licensed in Oregon, Washington, and California. Chad's career has afforded him the opportunity to live in 12 different states across the United States while buying and selling more than 12 homes and investment properties, including, most recently, in the Piedmont neighborhood of Portland. Originally from a suburb of Atlanta, Georgia, Chad most recently moved to Portland after spending the past couple of years in the San Francisco Bay Area where he worked for Alain Pinel Realtors. While Chad is relatively new to Portland, he is a Northwestern at heart: “I love everything about Portland. The people, the topography and climate, it is the best place I have live. From the mountains to the coast, there is just so much for my family to do.” Chad has quickly assimilated to the area based on his prior moving experiences. He understands firsthand the challenges with not only buying and selling homes but with moving and relocating. His previous experiences will be an invaluable resource to you throughout your real estate transaction. Chad is committed to quality, integrity, professionalism and excellent service when you enlist his services. Prior to beginning his real estate career, Chad had a successful 30-year retail career in sales and operational support for divisions of large organizations like L'Oreal and Limited Brands amongst others. Chad is extremely detail oriented and will utilize his strategic planning, analysis and innovative approach to ensure that you are completely informed throughout the real estate transaction and achieve your desired goals. He has provided support, training and leadership to thousands of employees and has been responsible for hundreds of millions in annual sales volume. If a commitment to service and being the #1 priority is important to you, then contact Chad.
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  • T: 503-389-0685
  • F: 503-961-8224
  • chadbrackett@livingroomre.com

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