Have you considered how frequently you check your home’s value compared to your bank account? It’s easy to overlook, but understanding your home’s worth is crucial for your financial health. When was the last time you had a professional assess your home’s value?

Consider this: for many, your home is likely your largest asset. If you've owned your place for a few years or more, it's probably been quietly accumulating wealth for you. You might be surprised to learn just how much it's grown in value over that time.

What Is Home Equity?

You might not even realize it, but you have a hidden asset called home equity. This is simply the difference between your home's current value and what you still owe on your mortgage. Over time, it increases as your home's value appreciates and as you make monthly payments on your mortgage. Let’s look at an example to clarify how this works.

Imagine your home is valued at $500,000, and you still owe $200,000 on your mortgage. That leaves you with $300,000 in equity. Many homeowners find themselves with substantial equity like this these days.

Cotality, which used to be known as CoreLogic, reports that the typical homeowner with a mortgage has roughly $311,000 in equity.

Why You Probably Have More Than You Think

Homeowners like you have record amounts of equity right now for two main reasons:

1. Home Prices Have Soared
Over the past five years, home prices across the U.S. have shot up by more than 57%, according to the Federal Housing Finance Agency (FHFA). Just take a look at the map below—it really puts things into perspective!

If you bought your home a few years back or even longer, it’s probably worth significantly more now due to the recent rise in prices.

2. Homeowners Are Staying Put Longer
These days, people are hanging on to their homes for a lot longer. According to the National Association of Realtors (NAR), the average homeowner now stays in their home for around 10 years. Check out the graph below—it shows just how much that’s changed over time!

That's a longer time frame than it used to be. During that decade, you've gained equity simply by making your mortgage payments and benefiting from the increase in home values.

If you’ve been in your home for a while, here’s a look at how much the hidden price growth has benefited you. According to NAR:

““Over the past decade, the typical homeowner has accumulated $201,600 in wealth solely from price appreciation.”
”

— NAR

What Could You Actually Do with That Equity?

Your home is likely your most significant financial asset. If you handle your equity wisely, it could lead to some great opportunities down the road.

Put Your Equity to Work for You
You can actually use the equity you’ve built up in your current home to help buy your next one. It might be enough to cover your down payment—or in some cases, you could even buy your next place outright with cash!

Make Your Home Work for You Now
Thinking about staying put? You could use your equity to renovate your current home and make it a better fit for your lifestyle. Plus, if you choose the right projects, they might boost your home’s value if you decide to sell down the road.

Turn Your Dream Business Into Reality
Always wanted to start your own business? Your home equity could give you the jumpstart you need—whether it’s for startup costs, gear, or getting the word out. It’s a smart way to invest in your future and potentially boost your income, too.

Bottom Line

Your home is probably worth more than you think. If you're considering selling, upgrading, or just want to explore your options, remember that your equity is more than just a figure; it’s a valuable resource.

If you sold your house and had a good amount of equity, what would you want to do with it? Let’s explore how to turn your home's value into your next big opportunity.