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Maximizing Your Home Equity
Learn how to maximize your home equity as an investment for your future.
Dustyn Haug
September 11, 2024
Today, I'm excited to share some incredible insights about Utah’s real estate market that could significantly impact your financial future.
As a reminder, last week we discussed why you may decide to buy or sell a home now vs. waiting. A big part of that conversation is the current state of your home equity.
Let's dive into how your home's value has grown over the past seven years and how you can leverage this growth to your advantage.
Table of Contents
Remarkable Home Price Growth 2017-2024
The U.S. housing market has experienced substantial appreciation since 2017, with some areas seeing truly remarkable growth. For instance, Boise City, Idaho has seen an astounding 102% increase in home values since 2017. Here in Utah, St. George has seen an 86% increase in home values, while Provo and Salt Lake City, aren’t far behind with a 74% increase since 2017. It might also surprise you to know Heber has seen the highest levels of appreciation in Utah at 98% since 2017. Here’s a table for each major metropolitan area in Utah:
207-2018 | 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | 2023-2024 | Cumulative | |
|---|---|---|---|---|---|---|---|---|
Logan | 11% | 8.5% | 9.4% | 29.5% | 16.4% | -3.2% | -1.4% | 89.6% |
Ogden | 10.6% | 8.1% | 8.8% | 28.7% | 14.7% | -4.7% | 1.3% | 85.4% |
SLC | 9.3% | 5.7% | 8.5% | 27% | 13.8% | -5% | 1.3% | 74.3% |
Heber | 9.8% | 5.6% | 9.1% | 32.4% | 21.6% | -5.1% | 2.6% | 98.3% |
Vernal | 3.7% | 11.8% | 10.4% | 8.1% | 19% | 8.9% | 3.3% | 85.2% |
Provo | 10.1% | 7% | 6.9% | 28.8% | 14.8% | -7.2% | 0.6% | 73.8% |
Cedar City | 9.7% | 5.4% | 7% | 30.2% | 17.2% | -4.7% | -0.2% | 79.6% |
St. George | 11.8% | 5.9% | 7.3% | 33.8% | 15.3% | -5.3% | 0.1% | 85.8% |
Even in more moderate markets, the growth has been significant, with most metropolitan areas across the United States seeing at least a 50% increase in home values. If you’re curious how much home values have increased across the country during these past 7 years, click the links below for an interactive map of each year:
Your Home: A Powerful Financial Asset
This growth isn't just a statistic—it's a tangible increase in your wealth. If you've owned your home for several years, you've likely accumulated substantial equity. This equity isn't just a number on paper; it's a powerful financial tool that you can use to:
Upgrade to a larger home: Use your equity as a sizable down payment on a more spacious or luxurious property.
Offset higher interest rates: While you could certainly use your equity as a large downpayment, you could also buy down the interest rate on your next purchase, potentially offsetting increases to your monthly payment.
Buy your next home with cash: If you’re looking to downsize, there’s a good chance you could use your equity to buy your next home with cash.
Invest in a second property: Consider using your equity to purchase an investment property or vacation home.
Fund home improvements: Increase your current home's value even further with strategic renovations.
Strategies for Leveraging Your Home Equity
Here are some more detailed strategies you can put your home equity to work and accomplish your goals. The last one is hardly talked about:
Home Equity Loan or Line of Credit: Borrow against your equity at favorable rates for major expenses or investments.
Cash-Out Refinance: Replace your current mortgage with a larger one, pocketing the difference in cash, tax free.
Sell and Upgrade: In this seller's market, your home's increased value can provide a substantial down payment on your next property. In many instances, this could even offset a higher interest rates.
Buy Now, Sell Later: If you’re worried about getting a good deal on your next home, but not wanting to sell your current home until spring/summer of 2025, this could be your solution. By utilizing a home equity loan, cash-out refinance, or even cross collateralizing your home, you could still potentially buy your next home now while the market is softer with less buyer competition, and sell your home next spring/summer. Using this strategy, you could get the best of both worlds.
A Note for First-Time Homebuyers
While the focus of this edition is on sellers, I want to address our first-time homebuyers as well. The path to homeownership might seem daunting, but it's important to understand that your first home is often the key to building long-term wealth, and opens up so many future options. As you've seen from the data, home values have consistently appreciated over time. By purchasing your first home and holding onto it, you're not just securing a place to live—you're investing in your future. The equity you build in your first home can make purchasing your second home significantly easier, setting you on a path to greater financial stability and wealth accumulation.
Remember, real estate is a journey, and I'm here to guide you every step of the way. Whether you're looking to sell, buy, or simply want to discuss your options, don't hesitate to reach out. Let's work together to make the most of your current situation.
Here to serve,
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PS… Halloween is Approaching
A Halloween client appreciation event is in the works! If you’re receiving this email, you are invited. I will announce more details in the coming weeks. But if you’re up for some free snacks, family fun, and out of this world magic, feel free to tentatively put Saturday, October 19th on your calendar.
