Home Equity

Why This May Be the Best Time to Tap Into Your Home Equity

If you have been following the financial news or even paying attention to prices at the grocery store, you know that our economy is facing high inflation, and many feel a recession is imminent.

Some of the reasons for the economic turmoil are due to supply chain disruptions and shortages due to the Covid related shutdowns during the past few years. Another reason is that the economy naturally ebbs and flows as part of a healthy cycle.

A recession is not always bad news. In fact, history has proven time and time again that recessions offer the best time to invest in certain assets. After all, the whole point is to buy assets when they are cheap and sell them later when they are high.

Has the Stock Market Bottomed Already?

The stock market has declined throughout 2022, and many stocks of superb companies have almost been cut in half for fears of inflation and a looming recession. We also know that historically, the stock market tends to bottom before the worst of a recession. Chances are, early 2023 will be the bottom of the stock market.

Picking the exact bottom is all but impossible, and in order to be a successful investor, you don’t have to buy at the exact bottom anyway, so it is highly likely that those who move money into the stock market anytime in 2023 will be handsomely rewarded over the long term.

Real Estate Prices are Still High

Last few years saw unprecedented skyrocketing residential real estate prices. Demand for new homes was at an all time high as millions of workers sought larger homes in order to facilitate social distancing and work from home needs.

Prices have fallen since the peak, brought down by both a healthy return closer to the mean and rising mortgage rates, but values are still significantly higher than they were in 2019. If you have been in your home for more than a few years, chances are you have a significant amount of equity locked up, ready to be tapped.

Interest Rates are High

One reason for the stock market decline is that the Federal Reserve has increased interest rates in order to slow down an overheated economy. This has, of course, spilled over into the mortgage industry as well.

High interest rates are sort of a double edged sword. On the one hand, they push down the stock market, giving investors a golden opportunity to pick up stocks at a discount.

High interest rates also make it expensive to borrow money. Traditional ways to access home equity may not be a good idea right now since the ensuing payments will be inflated. Taking on extra monthly payments may also be a bad idea right now due to a looming recession.

One solution to this issue is to use Homeshares to tap into your equity. Homeshares is not a loan. There is no monthly payment after you receive your cash. If you are considering tapping into your home equity, especially during 2023, a loan may be too risky, but with Homeshares, you can safely access the cash without worry of becoming overextended.

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