Home Equity in Des Moines: Equity Rich, Payment Shy

Most Des Moines homeowners who bought eight or ten years ago have done something quietly impressive: they've built six figures of equity without trying very hard. A mortgage paid down every month, a decade of rising values, and suddenly the starter home in Urbandale is worth $120,000 more than they owe.

Then they look at a $525,000 house in Johnston, run a mortgage calculator, and feel their stomach drop. The equity is real. So is the payment. Understanding how much home equity you have is the easy part. Understanding what it buys in today's market, at today's rates, is where the actual decision lives.

Your Equity Is a Number You Can Calculate Tonight

The formula is simple, and it's worth doing honestly:

Realistic sale price − mortgage payoff − selling costs = the equity you can actually spend.

Two of those three numbers trip people up. The sale price isn't your Zestimate or what your neighbor listed at. It's what comparable homes have actually closed for in the last few months, adjusted for your condition and updates. Selling costs, including commissions, title, transfer tax, and any repairs or credits, typically eat several percent of the price. Leave them out, and you'll overestimate your buying power by tens of thousands of dollars.

I've written about the full formula in Can You Afford to Move Up? The Real Equity Formula. This post is about what's different right now.

Why Today's Market Changes the Math

Four things are true in the Des Moines metro this fall that weren't true a few years ago.

Prices are still rising, but not evenly. The metro median sale price was $319,725 in August, up 5.5% from a year earlier, according to the Des Moines Area Association of Realtors. Johnston's typical home value rose just 0.6% over the past year, per Zillow. Your suburb and your street move your number more than the metro headline does, which is why your equity starts with local comps, not an average.

Buyers have more homes to choose from. Active listings across the metro reached 4,702 in August, up 11.8% from a year earlier, and the median home took 50 days to sell, per the same DMAAR report. More choice for buyers means presentation and pricing decide which homes get the showings, and which ones sit while the seller's equity waits.

Most homes sell below list. In Johnston, about two in three sales closed under list price in the data Zillow reported through August, while under one in five went over. Pricing your home off a hopeful list price instead of real closed sales is the fastest way to inflate your equity estimate.

Rates have doubled since you bought. Many families who bought around 2016 locked in rates under 4%. In late October, the 30-year average was 7.32%, per Freddie Mac. The equity you carry over hasn't changed. What each borrowed dollar costs has.

A Worked Example: From a $350,000 Starter Home to a $525,000 Next Home

Here's an illustrative Urbandale family. They bought in 2016 for $230,000 with 10% down at 3.75%, and they're eyeing a $525,000 four-bedroom in Johnston.

Their old principal and interest was about $960/month. The new one is nearly triple that before taxes, which in Johnston ran at an effective rate of about 1.48% in 2024, per ATTOM. The equity covers a strong 26% down payment. Whether the move works depends entirely on whether $3,500 a month fits their life.

That's the pattern I see most often: families who are equity-rich and payment-shy. The fix isn't more equity. It's a plan built around the payment.

Three Levers That Change the Outcome

Sell for more by marketing better. For a move-up family, the current home is the down payment on the next one. Every $10,000 you add to the sale price through pricing, prep, and presentation goes straight into that down payment. Put plainly: better marketing on this house is more money for your next one.

Choose the payment first, then the price. Decide the monthly number you're comfortable with, then let your lender translate it into a price range. Then learn what the step-up actually costs in your area. In Ankeny, four-bedroom homes averaged about $411,000 this spring, compared with about $317,000 for three bedrooms, per Trulia. A gap like that tells you quickly whether the extra bedroom fits the payment.

Ask your lender about the structure, not just the rate. A larger down payment, a seller-paid rate buydown, or a different loan type can each meaningfully move the payment. I'm not a lender or financial advisor, so this is a conversation to have with yours, ideally before you start touring.

And don't forget the costs that never show up in a calculator. I listed them in The Hidden Costs of Moving Up.

Let's Run the Numbers First

I grew up in Urbandale and live in Johnston, and before real estate I spent twenty years building marketing strategy. Both taught me the same thing: a big decision gets calmer once the numbers are on the table. The hard move-up conversations happen when someone has already picked the house and is working backward to justify it. The easy ones start with real equity and a comfortable payment, settled before the first showing. Then every house you tour is a clear yes or no, not a stretch.

If your next question is whether to buy first or sell first, I walked through all three options in Two Closings, One Moving Truck.

Thinking about moving up? Grab 20 minutes on my calendar or call or text 515-585-9849, and we'll run your numbers together. Curious what your current home would sell for first? Start with a home valuation. And if you've been asking yourself whether your home equity will be enough to move up, that's a good one to read tonight.

The example above is an illustration with rounded figures, not a quote. Your numbers depend on your sale price, loan terms, and taxes; confirm them with your lender.