Home Seller Profits Soared Last Year – Is It Time To Sell Your Home?

Home Seller Profits Soared Last Year – Is It Time To Sell Your Home?

That pile of money you’re living in just got a lot bigger…is it time to cash in?

According to the recently released Year-End 2021 U.S. Home Sales Report from Attom Data Solutions, U.S. home sellers saw record profits in 2021. The report shows that sellers nationwide realized a profit of $94,092 on the typical sale in 2021, up 45 percent from $64,931 in 2020 and up 71 percent from $55,000 in 2019.

These latest numbers, based on median purchase and resale prices, marked the highest level in the United States since 2008. Homeowner profits shot up as the national median home price rose 16.9 percent in 2021 to $301,000 – another record-breaking figure.

Why Home Sellers Are Making So Much Money

When a home appreciates in value, that appreciation is off the total value of the home and not just the amount of equity; rarely is someone putting 100% down on a home. Usually, there’s a mortgage associated with the purchase.

Even though a new homeowner today may only have a small bit of equity (down payment plus any principal payments that have been made), they are benefitting from appreciation the full value of the home! That is what leads to the incredible return on investment.

Should You Sell Your Home?

If you own a home today, you are sitting on a large amount of equity that can be used to purchase a new property and likely have some money left over. Many of the homebuyers we work with today are only just realizing how much equity they actually have and that they can implement a strategy to sell their current home, put a decent down payment on a new home, eliminate all of their debts, AND reduce their monthly mortgage payment.

Even if you are happy with your home and not ready for a move, accessing your home equity is still a great way to meet your financial goals. Accumulated equity cuts down your power of financial leverage – and you don’t want to pay that opportunity cost. You want to keep your money moving and employed to grow your wealth and achieve financial freedom.

Consider using a cash-out refinance to pull some of the money out of your home to either eliminate debt, buy another investment property, get started on that retirement plan that you’re potentially behind in, or just pay off any other liabilities that are sucking up your monthly cash.

The Bottom Line

It’s clear that being a homeowner is very lucrative right now. Home equity is at the highest it’s ever been, and it is continuing to increase at rates we have never seen before. This is allaying fears of another housing crash, as homeowners are less likely to be upside down in their homes should prices drop steeply (which, as we’ve mentioned before, is very unlikely).

If you would like to buy a home, but feel like you are locked into your current home and accessing your equity to fund a move would be too difficult, fill out the form below to request a meeting with one of our mortgage advisors to learn about NEO Home Loans’ Bulletproof Buyer Program. This new program allows you to buy the home that you want to purchase in cash BEFORE you sell your current home. This means you would have the ability to not only compete with all-cash offers, but also move up into your new home before having to access your current home equity.

*Original post by NEO Home Loans

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