One of the advantages of being a homeowner is the potential to accumulate equity over time. By selling your property, you can use the equity to purchase your next property. But before you can utilize it, you must understand what equity is and how it grows. Bankrate describes it like this:

“Home equity is the portion of your home you’ve paid off – in other words, your stake in the property as opposed to the lender’s. In practical terms, home equity is the appraised value of your home minus any outstanding mortgage and loan balances.”

Majority of Americans Have a Large Amount of Equity

If you've had your house for a time, you've probably built up some equity - and you might not even realize how much.

According to data from the U.S. Census Bureau and ATTOM, the majority of Americans currently hold a significant amount of equity (see graph below):

And owning such large sums of equity is beneficial to homeowners in multiple ways. Rick Sharga, ATTOM's Executive Vice President of Market Intelligence, explains:

“Record levels of home equity provide security for millions of families, and minimize the chance of another housing market crash like the one we saw in 2008.”

Your home equity builds over time. In addition to providing financial stability while you own your home, when the time comes to sell it, the proceeds could help you pay for your next home.