Home Prices Are Cooling—But Your Equity Is Still Winning Big

If you’ve seen headlines about home prices dipping in a few markets, it’s natural to wonder what that means for your own home’s value. But here’s the truth: for most homeowners, there’s no need to worry. In fact, you’re likely still far ahead thanks to the equity you’ve built over the past several years.

Let’s break down what’s really happening.

Why Home Equity Remains Strong

Home equity rises and falls alongside home prices. When prices climb, so does your equity. When prices cool—even slightly—equity growth slows too. And after the massive surge of 2020 and 2021, a little moderation was overdue.

During those years, inventory hit record lows while demand skyrocketed. Buyers competed for too few homes, pushing prices—and homeowner equity—to new highs. But prices were never going to rise at that pace forever. The recent cooling isn’t a sign of weakness; it’s a return to more sustainable growth.

Putting the Numbers into Perspective

Even with today’s slower pace, most homeowners are still in an incredibly strong position.

✅ Nationwide home prices have increased 45% since March 2020, according to Zillow.
✅ In markets where prices are dipping, the average decline is only about -4%.
✅ Every single U.S. state has seen home prices rise over the last five years, based on FHFA data.

That means years of growth far outweigh any minor recent declines. Homeowners who have held onto their property for even a few years are sitting on significant equity—often more than they realize.

What This Means for You

If you’ve owned your home for more than a couple of years, odds are you’ve built substantial equity. That puts you in a fantastic position if you’re thinking about:

• Selling and cashing out

• Upsizing or downsizing

• Using equity to invest in another property

And if you’re worried about a future crash? Experts say not to be.

Jake Krimmel, Senior Economist at Realtor.com, explains:

“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 short: the market isn’t collapsing—it’s stabilizing.

Bottom Line

Even with small price dips in a few markets, homeowners today are still sitting on near-record amounts of equity. The long-term gains remain strong.

If you’re curious about how much equity you’ve built—or what your home may be worth right now—reach out to a local real estate professional.

You might be surprised by just how far ahead you really are.