Why Your Home Equity Still Puts You Way Ahead
If you’ve seen the headlines about home prices dropping, you’re probably wondering what that means for your own home’s value. The truth? Even with small price dips in some markets, most homeowners are still sitting in an incredibly strong position because of their equity.
Let’s Talk About Home Equity and Home Prices
Your home’s equity tends to rise and fall right alongside home prices. When prices go up, your equity does too. And when the market cools a little, that growth just slows. It doesn’t disappear.
After the record-breaking price surge in 2020 and 2021, a little moderation was bound to happen. Back then, inventory hit record lows, and buyers were in full competition mode. That rush caused home values and homeowner equity to soar.
Now that more homes have come on the market, price growth has eased a bit, but that doesn’t mean you’ve lost ground. It just means the market is finding a healthier balance again.
Putting It Into Perspective
Even if prices in your area have dipped slightly, you likely have far more equity than you did just a few years ago. That’s great news if you’re thinking about selling or even just curious about your financial position.
According to Zillow, home prices nationwide are still up an incredible 45% since March 2020. And even in areas making headlines for price declines, the average drop is only around 4%.
So even with a few cooling spots, the gains from the past five years far outweigh any recent slowdowns. In simple terms, these small shifts aren’t wiping out years of growth. Homeowners who’ve owned their homes for more than a couple of years are still way ahead.
A Look Across the Country
The Federal Housing Finance Agency (FHFA) shows that every single state has seen home prices increase over the last five years. That means homeowners everywhere are sitting on significantly more equity today than they were just a few years ago.
If you’ve been in your home for a while, there’s a good chance your equity has grown more than you realize, and that can open doors to new opportunities whether that’s moving up, downsizing, or relocating to a new state.
And don’t worry about headlines predicting a crash. According to Jake Krimmel, Senior Economist at Realtor.com,
What we’re seeing now isn’t a collapse. It’s simply a market returning to balance after several years of rapid, unsustainable growth.
Bottom Line
Even with some minor price adjustments, homeowners today are still in a powerful position thanks to record amounts of equity.
If you’re curious what your home is worth or how much equity you’ve built, I’d be happy to run a personalized equity update for you. It’s often surprising (in the best way) to see how far ahead you really are.
📞 Lisa Mason | Mason Signature Homes
Licensed in California and Tennessee | Brokered by Orchard
Helping families unlock new chapters from CA to TN and beyond.
Source: Keeping Current Matters
