California Homeowners Are Sitting on $4.1 Trillion in Home Equity

California real estate is expensive. There’s no getting around that.

But there’s another side to the state’s high housing costs that doesn’t get nearly as much attention.

California homeowners with mortgages are sitting on approximately $4.1 trillion in combined home equity.

That’s nearly one-quarter of all mortgage borrower equity in the United States.

What Is Home Equity?

Home equity is essentially the portion of your property that you own.

If your home is worth $1 million and you still owe $400,000 on your mortgage, you have approximately $600,000 in equity.

That equity can increase in two ways: by paying down your mortgage balance and through increases in the value of your property.

For California homeowners who have owned for years, both may have been happening simultaneously.

The Other Side of California’s Expensive Housing Market

We spend a lot of time talking about the challenges created by California home prices, and for good reason.

Higher prices have made it increasingly difficult for first-time buyers and younger families to enter the housing market.

But those same property values have also helped existing homeowners accumulate significant wealth.

That’s the strange reality of California housing.

The prices that make homeownership difficult to attain can also make it an incredibly powerful wealth-building tool for those who already own.

$4.1 Trillion Puts It Into Perspective

It’s difficult to comprehend just how much $4.1 trillion really is.

Perhaps the better way to understand it is that California alone represents nearly 25% of the home equity held by mortgage borrowers across the entire country.

That’s an enormous concentration of household wealth sitting inside California real estate.

And for many individual homeowners, their property may now represent one of the largest assets they own.

How Much Equity Do You Have?

The $4.1 trillion statewide figure is interesting, but what matters to an individual homeowner is what’s happening with their property.

Your equity depends on your home’s current market value, what you originally paid, how much you still owe and what’s happened in your local housing market since you purchased.

If you’ve owned your home for several years, the number may surprise you.

If you’re curious what your home could sell for today, reach out to our team. We’ll look at the recent sales around your property and help you understand approximately how much equity you’ve built.