For many first-time buyers, the challenge today is not only the monthly mortgage payment; it’s to get enough cash together to buy the home in the first place.

That is where the conversation around IRA withdrawals becomes interesting. Under current law, first-time buyers can withdraw up to $10,000 from an IRA without paying the early withdrawal penalty if the funds are used toward a down payment on a home. A proposal in Congress, the Uplifting First-Time Homebuyers Act, would raise that limit to $50,000.

The Federal Reserve’s data shows that, for the majority of Americans, wealth is concentrated in two assets: retirement accounts and housing. Together these two assets represent about two-thirds of household assets. So, what happens if a household reallocates some of its retirement savings to purchase a home? To explore this, we will compare two scenarios:

In the first scenario, a household keeps $50,000 invested in a stock market index fund. Assuming a 10% annual return, which is considered typical, that investment would grow to about $129,700 over 10 years, creating about $79,700 in gains.

In the second scenario, that same household uses that $50,000 for the purchase of a first home. However, this is not the same as buying a $50,000 asset. Instead, it is going toward the purchase of a much larger asset through mortgage financing, a key way homeownership builds wealth. When a buyer uses $50,000 for a $400,000 home, appreciation happens on the full value of the home and not just on the down payment. Nationally, the typical homeowner has built nearly $232,300 in home equity over the past 10 years. That is a significant gain compared to $50,000 invested in a retirement account, where returns are earned only on the amount invested.

Using metro-level data across 171 U.S. markets, we examined how much home equity the local typical homeowners gained over a 10-year period. While the size of the gains varied, the gains are not concentrated in just a few high-priced coastal markets. Nearly every part of the country experienced significant wealth accumulation through homeownership.

How Various Markets Compare Across the U.S.

Markets With More Than $500,000 in Home Equity Gains

At the top of the list are some of the nation’s most supply-constrained housing markets. The typical homeowner in San Jose, California, accumulated nearly $1.25 million in home equity over the past decade. Some other markets also saw large gains, such as San Francisco (about $734,000), San Diego ($618,000), and Honolulu ($594,000). Limited supply relative to demand has substantially increased home prices in these markets.

Markets With $300,000 to $500,000 in Gains

The next group shows that strong wealth accumulation isn’t limited to California. Homeowners gained approximately $450,000 in the New York metro area, $443,000 in Boston, Massachusetts, $440,000 in Bridgeport, Connecticut, $419,000 in Miami, Florida, $396,000 in Boulder, Colorado, $368,000 in Salt Lake City, Utah, $368,000 in Reno, Nevada, and $364,000 in Manchester, New Hampshire. These markets are spread across the country, showing that strong home equity gains weren’t only limited to one part of the U.S.

Markets With $200,000 to $300,000 in Gains

Many of the country’s fastest-growing metros are included in this category: Madison, Wisconsin ($276,000), Charlotte, North Carolina ($268,000), Charleston, South Carolina ($266,000), and Raleigh, North Carolina ($252,000). Other examples include Austin, Texas ($243,000), Nashville, Tennessee ($240,000), Knoxville, Tennessee ($237,000), and Atlanta, Georgia ($235,000). While these gains were more moderate than those in the highest-appreciation markets, the typical home-equity gains were several times larger than the hypothetical stock market gain.

Markets With $100,000 to $200,000 in Gains

This represents the largest group of markets, including 76 metro areas or 44% of the areas included in the analysis. For example, the typical homeowner gained about $200,000 in the Dallas-Fort Worth market, $181,000 in Memphis, Tennessee, $174,000 in Des Moines, Iowa, and $167,000 in Chicago, Illinois. What makes this group so interesting: Even in these more typical housing markets, homeowners accumulated well over $100,000 in equity over the past decade.

Markets With Less Than $100,000 in Gains

Only six of the 170 metros fall into this category. These include Davenport, Iowa with about $96,000, Waterloo, Iowa ($94,000), Elmira, New York ($84,000), and Charleston, West Virginia ($84,000). There were only two exceptions in the data. The typical homeowner gained about $78,000 in Peoria, Illinois, slightly below the stock benchmark, and about $52,000 in the Decatur, Illinois metro area.

For policymakers and housing economists, the key question is not whether retirement savings should replace traditional down payment savings. It is whether the current policies reflect today’s housing market where home prices, down payments and closing costs are substantially higher than they were when the $10,000 limit was first created nearly 30 years ago. This limit was created when the median existing-home price in the U.S. was about $129,000, representing about 8% of the purchase price of a typical home. Today, with the median existing-home price above $440,000, that same $10,000 represents only 2% of the price. While the withdrawal limit has remained unchanged for about three decades, the housing market has changed significantly since then.