Here’s the Average Home Value in the U.S. How Does Yours Compare?

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Home values are up these days. Read on to see what the typical property is worth. 

In 2020 and 2021, mortgage lenders started offering really low interest rates to entice buyers at a time when the country was deep in the throes of a financial crisis. Back then, it was possible to sign a 30-year mortgage at around 3%. By contrast, the average 30-year mortgage rate today is around 8%, according to Freddie Mac.

Meanwhile, when rates were low, buyers across the country were clamoring to purchase homes. That drove home values up in a serious way.

Recent data from the Federal Reserve reveals that as of 2022, the average U.S. home value was $471,000. And even if your home isn’t worth quite as much, chances are, it’s worth more now than it was prior to 2020.

Having a higher home value could do a lot of good things for you, even if you have no plans to sell. But if you’re going to take advantage of an uptick in the value of your home, proceed with caution.

You can benefit from a higher home value without selling

Many people are hesitant to sell their homes right now for one big reason: Moving would likely mean signing a mortgage at a much higher interest rate. In fact, one big problem home buyers are running into these days is a lack of inventory. And a big reason is that people just aren’t motivated to sell when mortgage rates are so high.

But the good news is that you don’t need to sell your home to benefit from its higher value. Rather, you can tap your home equity via a loan or line of credit if you could use the money to do things like make improvements or repairs.

You can also borrow against your home equity to do something that has nothing to do with your home. Let’s say you’re eager to start a business. Qualifying for a small business loan can be challenging. But let’s say you also have $50,000 worth of tappable equity in your home. You may be able to borrow that sum and use it as seed money to get your venture off the ground.

Be careful when tapping home equity

If your home’s value has increased in a big way, it can be tempting to tap your equity and use it to improve your life in the near term. But remember, falling behind on a home equity loan or line of credit could, in time, put you at risk of foreclosure, not to mention damage your credit score significantly. So before you rush to tap your equity, think about whether you’re doing so for an important reason.

It’s one thing to borrow against your home to build an office in your basement so you can work remotely more easily. It’s another thing to borrow against your home to go on a vacation that might bring you temporary enjoyment but isn’t necessarily going to better your life beyond that.

Of course, once housing inventory starts improving, we could see the average home value drop below $471,000. Don’t be surprised or panic if that happens.

Overall, home values tend to rise in the long run. In fact, in 10 years from now, the average home value is likely to be higher than $471,000, even if values experience some temporary declines along the way.

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