The COVID-19 pandemic brought significant changes to the economy and housing market, but one clear positive for homeowners was the substantial increase in home equity. According to data from the U.S. Census Bureau, homeowning households experienced remarkable growth in equity and net worth between 2019 and 2022, creating a financial cushion for many Americans.

Key Highlights: Growth in Home Equity

• The median home equity for homeowners rose by $47,900, jumping from $150,146 in 2019 to $198,000 in 2022 (adjusted for inflation).

• Home equity emerged as the largest asset held by U.S. households, with 62.2% of households reporting equity in their homes in 2022.

• Among households with home equity, the median value reached $198,000.

Impact on Household Net Worth

The increase in home equity also played a critical role in boosting overall household net worth:

• The median net worth of U.S. households increased by $40,000 during the same period, rising from $136,500 in 2019 to $176,500 in 2022 (adjusted for inflation).

• While 35.7% of households reported holding home debt, the median debt value was significantly lower, at $160,000, highlighting the positive equity many homeowners had built.

What This Means for Homeowners

This rise in home equity has provided homeowners with increased financial security and options. Whether you’re considering refinancing, leveraging your equity for renovations, or selling to upgrade, the boost in home values has created new opportunities.

Why Did Home Equity Increase?

The surge in home equity during the pandemic was driven by several factors:

1. Rising Home Prices: A competitive housing market during the pandemic pushed home values to new highs.

2. Low Mortgage Rates: Historically low interest rates during this time allowed many buyers to enter the market and existing homeowners to refinance for better terms.

3. Limited Inventory: A shortage of homes for sale further contributed to higher prices, increasing equity for current homeowners.

Real Estate Implications

The pandemic highlighted the value of homeownership as a financial asset. For prospective buyers, understanding the long-term benefits of owning property is crucial, especially in a competitive market. For sellers, this equity boost means now could be an excellent time to list your home and maximize your return.

If you’re considering buying or selling a home, understanding these market trends can help you make informed decisions. As always, consult with a trusted real estate professional to navigate the current market effectively.

Source: Adapted from PAR JustListed, January 15, 2025.