What Is Home Equity?

Home equity is the difference between your home’s current market value and the remaining balance on your mortgage.For example: if your home is worth $500,000 and you still owe $200,000, your home equity is $300,000.

According to recent data from Cotality, the average U.S. homeowner with a mortgage has about $302,000 in home equity.

Why Homeowners Have Built Significant Equity

1. Home Price Appreciation

   

   The Federal Housing Finance Agency (FHFA) reports that national home prices have risen about 54% in the past five years. In Chicago and Illinois, suburban markets in particular remain strong seller’s markets, meaning many homeowners have seen substantial gains.

2. Longer Ownership Periods

   

   The National Association of Realtors (NAR) notes that the average homeowner now stays in their home for about 10 years. With consistent mortgage payments over that period, equity builds steadily. In fact, over the last decade, homeowners on average accumulated $200,000+ in wealth simply from appreciation and repayment.

   
   

How Can You Use Your Home Equity?

Home equity isn’t just a number on paper—it’s a powerful financial resource:

• Next Home Purchase: Use equity for a larger down payment or even an all-cash purchase.

• Home Renovation: Remodel to suit your lifestyle while boosting long-term value.

• Business Investment: Tap into equity for startup or business growth capital.

  
  

Final Thoughts

Many homeowners underestimate—or never check—the value they’ve built up. But your home is likely your biggest asset and a central piece of your financial plan. Knowing your current home value and equity is the first step to making smarter decisions for the future.

📌 If you’d like to know exactly how much equity you’ve built, connect with a trusted local expert to review the numbers. Prepared homeowners have the best opportunities.

Chicago BDB | Hansang Chul📞 773-717-2227 | 📧 ChicagoBDB@gmail.com