Why Your Home Equity Still Puts You Way Ahead
TL;DR
Even though some headlines suggest home prices are cooling, most homeowners are still sitting on significant equity. Thanks to years of strong price growth since 2020, small market corrections haven’t erased the gains. If you’ve owned your home for a few years, you’re likely in a much stronger position than you think.
Why Price Headlines Can Be Misleading
If you’ve seen recent news about home prices dipping in certain markets, it’s completely normal to feel concerned. Many homeowners immediately wonder what that means for the value of their home and more importantly, for their equity.
Here’s the key thing to understand: a slowing market is not the same as losing value.
After the historic price surge of 2020 and 2021, some moderation was inevitable. At that time, record-low inventory caused intense buyer competition, pushing prices and homeowner equity up at unprecedented levels. That kind of rapid growth simply wasn’t sustainable long term.
Today’s market looks different, but that doesn’t mean homeowners are worse off. In fact, for most people, the opposite is true.
How Home Prices and Equity Work Together
Home equity generally moves in line with home prices:
When prices rise, equity grows
When price growth slows, equity growth slows too
What matters most is the long-term picture, not short-term fluctuations.
As more homes came onto the market this year, price appreciation naturally cooled. That shift helped bring balance back to the market—but it did not wipe out the massive gains homeowners built over the last several years.
Slower growth doesn’t mean lost equity. It simply means the market is stabilizing.
The Big Picture: You’re Still Far Ahead
Let’s put recent changes into perspective.
According to Zillow, home prices nationwide are up roughly 45% since March 2020. That’s an extraordinary amount of appreciation in a relatively short time.
Even in the markets seeing the most negative headlines, price declines are modest—averaging around 4%. When compared to the gains of the last five years, those small dips barely make a dent.
In most areas, prices are still rising—just at a healthier, more sustainable pace.
Equity Gains Exist in Every State
Data from the Federal Housing Finance Agency (FHFA) confirms something important:
home prices are higher today than they were five years ago in every single state.
That means homeowners across the country have built substantial equity—often far more than they realize.
If you’ve owned your home for several years, chances are you’re sitting on equity that simply didn’t exist before the pandemic. That puts you in a powerful position if you’re thinking about selling, downsizing, relocating, or upgrading to a new home.
Should You Worry About a Market Crash?
Short answer: no.
Economists agree that the current market correction is not a warning sign of a crash. Jake Krimmel, Senior Economist at Realtor.com, explains:
“The slight recent declines in aggregate value and total home equity are not cause for concern… large price declines nationally are extremely unlikely in the near term.”
This market shift reflects balance—not danger. After years of rapid appreciation, today’s conditions are healthier and more sustainable.
What This Means If You’re Thinking of Selling
If you’re a homeowner considering a move, your equity can give you options:
Use it toward a larger home
Downsize and reduce monthly costs
Relocate without financial strain
Offset higher interest rates with a larger down payment
The key is knowing how much equity you actually have, not relying on headlines.
Frequently Asked Questions
Q: What is home equity?
A: Home equity is the difference between what your home is worth today and what you still owe on your mortgage.
Q: Have homeowners lost equity because prices cooled?
A: In most cases, no. Even where prices dipped slightly, the gains from the past five years far outweigh those declines. If you want a personalized equity breakdown, reach out to Alex Parmenidez for a local analysis.
Q: Are home prices still rising?
A: Yes, in many markets prices are still increasing—just more slowly than during the peak years of 2020–2022.
Q: Is now a bad time to sell?
A: Not at all. Many sellers are using their equity to make strategic moves. With the right pricing and marketing plan, today’s market can still work in your favor.
Q: How do I find out how much equity I have?
A: A local home value analysis is the best place to start. Alex Parmenidez can help you understand your true market value and equity position.
By Alex Parmenidez, REALTOR® | Coldwell Banker Realty
Alex Parmenidez | Realtor® Licensed CT-MA-RI | Coldwell Banker Realty
196 Waterman St, Providence, RI 02906
C: (401) 426-4825 | O: (401) 351-2017
