Why Your Home Equity Still Puts You Way Ahead

You may have seen headlines about home prices dipping, and it’s natural to wonder what that means for your home’s value. The good news: even with slight price softening in some markets, most homeowners are still far ahead — thanks to strong equity gains over the past few years.

Equity Follows Home Prices

When prices go up, equity grows. When prices cool, equity growth slows — but that doesn’t erase the major gains homeowners have built since 2020.

During the record-low inventory market of 2020 and 2021, prices surged and equity climbed fast. That pace wasn’t sustainable forever, and the moderation we’re seeing now is simply the market finding balance again.

Putting It Into Perspective

According to Zillow, home prices nationally are still up 45% since March 2020. Even in areas seeing declines, the average drop is only about 4% — a small dip compared to the massive growth of the last five years.

Zoom out even further: FHFA data shows every single state has seen prices rise over the past five years. That means homeowners across the country are holding significantly more equity than they had pre-pandemic.

In most cases, if you’ve owned your home for more than a few years, you’re still in an incredibly strong position — whether you’re thinking about moving up, downsizing, or simply weighing your options.

As Realtor.com economist Jake Krimmel puts it, large national price declines are “extremely unlikely,” and the recent moderation isn’t a red flag — it’s a sign of a healthier market.

Bottom Line

Even with some price cooling, homeowners today are sitting on near-record equity.

If you’re wondering how much equity you’ve built — or how it could help you with your next move — let’s talk. You may be pleasantly surprised by where you stand today.