Your Home Might Be Worth Way More Than You Think—Here’s Why

Many home sellers are ending the summer feeling frustrated after struggling to find buyers willing to meet their price, but the good news is they may be sitting on a hidden windfall without even realizing it.

Americans who have owned the same home since the 1990s or early 2000s have built up high levels of equity thanks to rising home prices, which in many markets have doubled, tripled, or more over the years, according to the Fall Selling Season Outlook from Realtor.com®.

"That long-term appreciation, combined with years of mortgage payments steadily reducing your balance, has likely left you with record-high equity," says Realtor.com senior economic research analyst Hannah Jones.

Home equity refers to the difference between your home's market value and the remaining balance on your mortgage—in other words, the share of the property you actually own.

Because home values rise and fall, home equity fluctuates accordingly. Additionally, as mortgage payments are made every month and the loan balance is paid down, the equity gradually increases.

"Homeowners who’ve held onto their homes since the '90s or early 2000s are often sitting on a goldmine they don’t fully realize," Steven Glick, director of mortgage sale at HomeAbroad Inc, tells Realtor.com. "Back then, you could snag a house for $100,000-$150,000 in many markets; now, median home prices are pushing past $400,000 nationally."

Untapped wealth

For example, a homeowner who bought a house for the median price of $229,000 in 2005, with a 20% down payment, over the past two decades has seen the property's value surge by about 90%, bringing the total equity to $336,417.

In other words, the owner of that home now finds themselves sitting on more than $206,000 in added equity, according to report.

In some markets, the appreciation is even more dramatic, particularly for those who were fortunate enough to snap up properties before the housing boom of the early 2000s.

According to data from Realtor.com, the typical home bought in 1995 for $114,600 (with a 20% down payment) saw an appreciation gain of $320,700, boosting the property's total equity to $435,300, or nearly four times the original purchase price. 

And based on the latest available figures, a large percentage of U.S. homeowners have accumulated high levels of home equity over the years.

Nearly half of today’s homeowners have lived in their home for more than 15 years, and 1 in 4 for over 25 years.

Staying put is particularly common among older homeowners: About half of those aged 65 years and older moved into their current home before 2000.

"Many have 70-80% of their home's value as equity because their original loan was so small compared to today’s prices," says Glick. "It’s not uncommon for these folks to have $400,000-$500,000 or more to work with, especially in high-demand areas."

Home equity reaches a new record

In the second quarter of 2025, nationwide home equity climbed to a record-high combined total of roughly $17.8 trillion, including $11.6 trillion in tappable equity that can be borrowed against through a home equity loan while maintaining a 20% cushion, according to the August 2025 Intercontinental Exchange (ICE) Mortgage Monitor report. 

"Homeowners are actively drawing on record equity with cash-out refinance loans, signaling increased demand despite elevated rates," says Andy Walden, head of mortgage and housing market research at ICE. "Meanwhile, a substantial cohort of people who purchased homes over the last three years are watching on the sidelines for rates to drop so they can refinance into a lower monthly payment."

In addition, the share of "equity-rich" homes where owners owe no more than half their property's value increased to 47.4% in the second quarter of 2025, up from 46.2% in the first quarter, reversing a trend that saw three consecutive quarters of declines, according to a recent report from ATTOM, a property data and real estate analytics firm.

"With home prices at record highs, you’d expect to see owners enjoying more equity in their homes, so it’s good to see equity-rich rates rebound after a few slower quarters," says Rob Barber, CEO of ATTOM.

How to use home equity

Jones notes it's important to remember that "equity isn't just a number on paper, it's real wealth you can use."

There are various ways to access a home's equity, including a cash-out refinance, a home equity loan, or a home equity line of credit (HELOC).

A homeowner who opts for a cash-out refinance takes out a new loan that is bigger than the first mortgage and pockets the difference in cash.

A home equity loan allows a homeowner to borrow money based on the value of their home to pay for other expenses, such as renovations or college tuition.

Meanwhile, a HELOC functions more like a credit card secured by the home's equity, allowing the owner to borrow up to a certain amount of cash and then pay it off or reborrow as needed over the term of the loan.

Selling an equity-rich home

But arguably the most straightforward way to tap into a home's equity is by selling it.

"Whether you’re downsizing, relocating, or ready to invest in a new property, selling could allow you to cash in while prices remain historically strong," says Jones.

Although for-sale homes are waiting for a buyer longer than during the frenzied COVID-19 pandemic era, longtime homeowners with substantial equity have an ace up their sleeve: greater flexibility to wait and price strategically to attract buyers.

"If you’re sitting on big equity, now’s a decent time to sell and lock in those gains before prices soften further," suggests Glick. "Use the cash to buy something affordable outright or with a small mortgage, especially if you’re downsizing or relocating. Just price competitively, buyers are pickier with demand being weak."

Glick says that for those looking to move into a smaller home, selling now can "unlock a ton of cash."

"You could buy a cozy condo or smaller house outright, often with no mortgage, and pocket the rest for retirement or other goals," he adds. "I’ve seen people sell a $700,000 home, buy a $300,000 downsizer, and walk away with $400,000 to boost their savings. It’s a great way to simplify life and dodge high rates on new loans."  

So far this year, the housing market has experienced a slowdown caused in part by affordability challenges and elevated mortgage interest rates, which have kept many would-be buyers firmly on the sidelines.

Sellers have grown frustrated, prompting some to delist their properties rather than offer price cuts.

But Jones points out that sellers are still in a relatively good position compared to 25 years ago, when they outnumbered buyers.

What's more, for longtime homeowners, decades of home value appreciation, as previously mentioned, could mean potentially significant profits when selling.

But that does not mean that homeowners can rest on their laurels, especially with inventory rising, prices softening in some parts of the U.S., and homes taking longer to find a buyer.

In July, the median list price was $439,450, in line with 2023–24 levels, while the typical home spent 58 days on the market, seven more than a year ago, according to the monthly housing market trends report.

Inventory levels vary widely across regions, with the South and West seeing supply levels 4.3% and 9.3% higher than pre-pandemic, respectively, and the Midwest and Northeast still falling below the 2019 threshold by 40% and more than 51%.

According to Jones, no matter where they are, sellers looking to make a deal and turn a profit next spring should start preparing now by interviewing real estate agents, assessing their home's value, identifying needed repairs, and choosing the ideal time to list to match peak spring demand. 

"Understanding what buyers want, and what they’re willing to pay, is key to a successful sale," reminds Jones.