Unlocking Home Equity Opportunities for Your Retirement Dreams
Reaching retirement marks a momentous life milestone, ushering in a host of changes and fresh prospects. As this exciting new chapter unfolds, you might contemplate the possibility of selling your current residence to discover a more suitable home that aligns with your evolving needs.
Thankfully, you might find yourself better prepared for a change than you think. Here are some compelling reasons why.
Consider How Long You’ve Been in Your Home
Between 1985 and 2009, homeowners typically resided in their homes for approximately six years. However, data from the National Association of Realtors (NAR) indicates a longer average home tenure in recent times. Since 2010, the typical duration of homeownership has extended to slightly over nine years, as illustrated in the graph below:
Consequently, a growing number of homeowners have been residing in their homes for even more extended periods in recent times. When you occupy a residence for a substantial duration, it's only natural for your life to undergo transformations while within those walls. As these life events and milestones occur, your requirements may evolve. If your current home no longer aligns with these changing needs, you could discover more suitable alternatives waiting for your consideration.
Consider the Equity You’ve Gained
Moreover, if you've resided in your home for an extended period, it's highly probable that you've accumulated a significant amount of equity, which can serve as a valuable resource for your upcoming transition. This equity accrues as you make mortgage payments and as property values appreciate over time. Furthermore, the longer you've owned your home, the more substantial your potential equity growth may be. This trend is underscored by data from the Federal Housing Finance Agency (FHFA), as depicted in the graph below:
Although property values differ depending on the location, the national average indicates that homeowners who have resided in their homes for five years witnessed an approximate 60% increase in their property's worth. Furthermore, those who have owned their homes for a remarkable 30 years experienced an almost threefold surge in their property's value during that period.
Whether your aspirations involve downsizing, relocating to your ideal locale, or getting closer to friends and family, your accumulated equity can play a pivotal role in achieving them. Whatever your housing objectives may be, a reliable real estate agent can collaborate with you to identify the optimal solution. They will assist you in selling your current residence and provide guidance in the process of acquiring a home that perfectly aligns with your current lifestyle and preferences.
Bottom Line
While you prepare for your retirement, reach out to a nearby real estate agent to ascertain the extent of the equity you've accumulated over time and strategize on how you can leverage it to acquire a home that suits your evolving requirements.
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