Your Equity Remains Strong Even When Home Prices Dip

By Kandie Frederick

Growing up on the central coast, Kandie is a third generation family in the North County and a second generation family in real estate. Joining Country Real Estate in 2000, and graduating from Cal Poly in San Luis Obispo, she brings a background of Agricultural Business to combine with her knowledge of the local real estate market. Working with her family and their decades of local real estate development, she is deeply connected to the roots of our community and its growth.

Is your home equity in trouble? You may have seen headlines saying that home prices are dropping. That can feel scary, especially if your home is one of your biggest investments. But the truth is, most homeowners are still in a very good spot.

Let me explain why.

What equity really means. Home equity is the amount of your home you truly own. If your home is worth $600,000 and you still owe $400,000, then your equity is $200,000. That number grows as your home’s value goes up or as you pay down your mortgage.

Even though home prices are slowing slightly in 2025, most homeowners saw big increases in value between 2020 and 2021. That means you likely gained a lot of equity in those years. Now, with more homes for sale, prices are leveling off. But that doesn’t mean your equity is disappearing. It just means it’s growing a little more slowly.

Looking at the bigger picture. Even if prices dipped slightly in some areas, the big picture still shows strong growth. Zillow reports that home prices nationwide have gone up around 45% since early 2020. That’s huge. In fact, even in markets where prices slipped by about 4%, those drops barely made a dent in the equity built up over the last five years.

According to the Federal Housing Finance Agency, every state has seen price increases over that time. If you’ve owned your home for several years, chances are your equity has grown a lot, even with recent price changes.

What this means for you. Having equity gives you options. You can use it to move into a new home, downsize, renovate, or pay off other debts with higher interest rates. It also gives you some financial protection if the market changes.

Unlike in 2008, when many homeowners owed more than their home was worth, today’s homeowners are in a stronger position. They owe less and own more.

If you’re curious about your home’s equity and what it means for your next move, I’d love to help. I can give you a quick local equity estimate; no sales pitch, just real information to help you make smart decisions. Call me at (805) 239-9566 or email kandie@countryrealestate.com to get started.