If you’ve seen headlines about home prices dropping, it’s easy to wonder what that means for the value of your Triangle area home, too. But here’s the truth: even in markets where prices have dipped slightly, you’re likely still far ahead—and it’s all thanks to your home equity.
The Relationship Between Home Prices and Equity
Home equity and home prices go hand in hand. When prices rise, equity rises. When prices cool, equity growth slows too. That’s exactly what we’ve seen recently. Following the historic home price surge in 2020 and 2021, a slight slowdown was expected. During that time, inventory was at record lows. That created intense competition and caused home values and your equity to spike.
But such rapid growth couldn’t continue forever. As the market normalized and more homes became available, price growth eased. Naturally, so did equity gains. But slowing gains don’t equal losses.
Putting it into Perspective
Odds are, you still have significantly more equity than you did just a few years ago. That puts you in a strong position if you’re thinking about selling your Raleigh home. Here’s the proof.
According to Zillow, home prices have risen an astonishing 45% nationally since March 2020. And while some metros are seeing minor price drops, the national trend still shows price growth. Even in areas where prices have dipped the most, the average decline is only about -4%. What does that mean for you? Most markets are still appreciating, so many sellers have nothing to worry about. And in the few places with declines, the gains over the past five years are still substantial.
Those modest drops don’t erase years of appreciation. If you’ve been in your Triangle area home for a while, you’re still in a great equity position. This applies across the board. Take a look at this data from the Federal Housing Finance Agency (FHFA). It shows home price appreciation by state over the last 5 years (see graph below):
Every single state has seen price gains, meaning more equity for nearly all homeowners. So, whether you’re planning to downsize, relocate, or move up, that equity is a powerful financial tool.
Equity Concerns? Don’t Worry
Worried that a market shift will drain your equity? You’re not alone. But listen to what Jake Krimmel, a Senior Economist, has to say:
The slight recent declines in aggregate value and total home equity are not cause for concern . . . Although the market is coming into better balance, large price declines nationally are extremely unlikely in the near term . . .”
This isn’t a market crash, it’s a healthy moderation. After years of rapid growth, a steadier pace is expected and welcome. Most homeowners remain in a very strong equity position, and that gives you flexibility and peace of mind.
Bottom Line
Even with prices softening in some areas, homeowners are still sitting on near record-high equity. Wondering how much equity you’ve built up, and how far ahead you really are? Contact Linda Craft Team Realtors and crunch the numbers. You may be pleasantly surprised by how much your Raleigh home is worth today.