It’s easy to track your checking account, investments, or retirement savings, but one of the most important parts of your financial picture often gets overlooked: your home’s value.

If you’ve owned your home for a few years—or even longer—it’s been quietly building wealth for you. And when you take a closer look, you might be surprised at just how much equity you’ve accumulated.

Understanding Home Equity

Home equity is the difference between your home’s current market value and what you still owe on your mortgage. It’s essentially the portion of your home that you truly “own,” and it grows in two key ways:

1. Mortgage Payments: Each month, a portion of your payment goes toward paying down the principal on your loan, increasing your ownership stake.
   
   
2. Home Price Appreciation: As the market value of your home rises, so does your equity, often at a faster rate than many people expect.
   
   

Example: If your home is worth $500,000 today and you have $200,000 left on your mortgage, you have $300,000 in equity.

According to Cotality (formerly CoreLogic), the average homeowner with a mortgage currently has about $311,000 in equity—a figure that has grown substantially over the past several years.

Why Your Equity Is Likely Higher Than You Think

There are two major reasons homeowners are sitting on record levels of equity today:

1. Significant Home Price Growth
   The Federal Housing Finance Agency (FHFA) reports that home prices nationwide have increased more than 57% over the last five years. If you purchased your home even a few years ago, it’s likely worth considerably more now than at the time of purchase.
   
   
2. Longer Homeownership Periods
   According to the National Association of Realtors (NAR), the average homeowner now stays in their home for about 10 years, up from previous decades. That extended timeline allows your equity to grow steadily—not just from monthly mortgage payments, but from cumulative price appreciation.
   
   

NAR data shows that over the past decade, the typical homeowner has accumulated $201,600 in wealth solely from price appreciation. That’s equity you may not have even realized you were building.

How You Can Leverage Your Home Equity

Home equity isn’t just a number—it’s a tool. Here are some ways it can work for you:

1. Fund Your Next Home Purchase
   Whether you’re upsizing, downsizing, or relocating, your equity can serve as a down payment—or even allow you to purchase a new home outright in some cases.
   
   
2. Renovate Your Current Home
   Using equity to make strategic home improvements can increase your comfort and enjoyment today while boosting your property’s future resale value.
   
   
3. Invest in Your Future
   Equity can provide the financial foundation for starting a business, funding education, or pursuing other opportunities that increase your long-term earning potential.
   
   

Bottom Line

Your home is likely one of your largest financial assets, and the equity you’ve built can open doors to new opportunities—whether that’s buying your next home, upgrading your current space, or investing in your future.

If you’ve never had a professional assessment of your home’s current value, now is the perfect time. Understanding your equity gives you clarity, confidence, and options.

Question for You: If you sold your home today and had significant equity to work with, what would you do next?

Connect with a local real estate agent to discover how your home’s value can support your next move and help you make the most of this powerful financial tool.