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Homeownership is the largest source of wealth among families, with the median value of the primary residence worth about ten times the median value of financial assets held by families.1 Home equity gains are built up through price appreciation and by paying off the mortgage through principal payments.

Over the past 10 years, at the national level, a homeowner who purchased a single-family existing home 10 years ago would have gained $229,400 in home equity if the home were sold at the median sales price of $360,700 in 2021 Q4. Home prices rose at a strong annual pace of 8.8% annually, yielding a pure gain due to a price appreciation of $209,400.

Home prices rose have increased even more steeply over the past five years, at an annual pace of 9.7%. A homeowner who purchased a typical home five years ago would have gained $125,300 from just price appreciation alone.

The equity gains will depend on the home's characteristics but, over a 5- or 10-year period, the characteristics of a typical home will likely not have changed much, so the change in the median sales price change is still a good indicator of the typical equity gains due to price appreciation. However, talk to a REALTOR® when buying or selling a home, who can assist with giving you the best offer or list price on your home.

1 Source: Federal Reserve Board of New York, Survey of Consumer Finances. In 2019, the median value of the primary residence was $225,000 and the median value of any financial asset held by families (renter or homeowner) was $25,700. Even among homeowners, the median value of their financial asset was just at $63,400.


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