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Single-Family Homeowner Wealth Reaches $225,000 Over 10-Year Period

Market Data + Trends

Single-Family Homeowner Wealth Reaches $225,000 Over 10-Year Period

Homeowners who purchased a single-family existing home 10 years ago could rake in significant home equity gains in an elevated seller’s market

January 10, 2022
home equity
Image: Stock.adobe.com

Homeownership is the largest source of wealth among U.S. families, according to The National Association of Realtors, especially as net gains from price appreciation and mortgage payments reach nearly ten times the median value of financial assets held by single-family homeowners. Sellers who listed their homes for the median sales price of $363,100 in 2021 likely accumulated $225,000 in home equity over the past decade if they originally bought their existing homes at the median sales price of $169,000 ten years ago.

Homeowners in 15 metro areas located predominantly in the West earned enough home equity over a 10-year period to purchase a single-family existing home at the current national median sales price of $363,100. In 97% of 182 metro areas across the United States, home prices rose faster than wages over a 5-year period.

The past five years have seen increasingly rapid price appreciation. Nationally, median single-family existing-home sales rose 8.5% annually from 2016 Q3 through 2021 Q3. A homeowner who purchased a typical home five years ago would have accumulated $144,400 in home equity, of which $121,800 are from price appreciation, or 84% of total home equity gains.

While home prices fell about 30% from the peak level in 2006, home prices have rebounded, with the median single-family existing-home sales price rising at an annual pace of 3.2% from 2006 Q3 through 2021 Q3. A homeowner who purchased a home 15 years ago would typically have accumulated $193,300 in home equity, of which $137,700 is price appreciation.

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