Why Your Home Equity Still Works in Your Favor
If you’ve seen headlines about home prices softening, it’s natural to wonder what that means for your home’s value. The truth? You’re probably still in a great spot—thanks to your home equity.
How Prices and Equity Move Together
Home equity follows home prices. When values climb, equity grows. When prices cool, that growth simply slows. And after the massive surge of 2020 and 2021, a little moderation was bound to happen.
During those years, low inventory drove intense buyer competition, pushing home prices—and equity—through the roof. That pace wasn’t sustainable forever. As more homes have come to market this year, price growth has eased, which means equity gains have too. But easing doesn’t equal losing.
Putting the Numbers in Perspective
You still likely have far more equity than you did just a few years ago, and that puts you in a strong position if you’re thinking about selling or leveraging your investment.
According to Zillow, home prices nationwide have climbed about 45% since March 2020. Even in the few markets where prices dipped recently, the average decline is just around 4%—a small correction compared to years of growth.
That means the value you’ve built up isn’t disappearing—it’s just stabilizing. The long-term trend still shows homeowners well ahead.
Equity Growth by State
Data from the Federal Housing Finance Agency (FHFA) shows that every single state has seen price gains over the past five years. That means homeowners across the country have significantly more equity today than they did pre-pandemic.
If you’ve owned your home for a while, chances are you’ve built the kind of equity that can give you flexibility—whether you’re planning to upgrade, downsize, or invest elsewhere.
No Crash on the Horizon
And if you’re worried this balance means something bigger is coming, here’s some perspective from Jake Krimmel, Senior Economist at Realtor.com:
“The slight recent declines in aggregate value and total home equity are not cause for concern. Although the market is coming into better balance, large price declines nationally are extremely unlikely in the near term.”
In other words, what we’re seeing now is a market returning to normal after a few years of extreme growth—not one that’s falling apart.
Bottom Line
Even with modest price drops in a few areas, most homeowners are still in an incredibly strong position. Your equity has likely grown more than you realize—and it’s still one of your biggest financial advantages.
If you’re curious about how much equity you’ve built or what your home could sell for today, let’s connect. You might be pleasantly surprised by the numbers.
