Study: States Where Homeownership Delivered the Biggest (and Smallest) Returns

Home equity has seen a remarkable increase across the United States since 2020, with homeowners in various regions experiencing different levels of growth. While the national average home equity has risen by an impressive 142 percent, some states have seen significantly higher gains than others. This variation is influenced by factors such as regional real estate market dynamics, home price appreciation, and mortgage debt levels.

The most substantial gains in home equity have been recorded in the Southern and Midwestern states, while Western states have generally experienced slower growth or even declines. According to data from Zillow and Experian, the analysis focused on mortgage-holding homeowners, excluding those with paid-off mortgages. The findings reveal that homeowners in certain areas have benefited more from the real estate boom than others.

Top States for Home Equity Growth

West Virginia leads the list with a staggering 450 percent increase in average home equity since 2020. This is largely due to the state's relatively low home prices, which averaged $171,861 in 2025. Oklahoma follows closely with a 431 percent increase, driven by affordable home prices and lower mortgage balances. Connecticut ranks third with a 297 percent gain, despite having the highest home prices and mortgage debt in the country. Kansas and Illinois also made the top five, with 234 percent and 217 percent increases respectively.

These states have seen significant improvements in their home equity due to a combination of rising home values and manageable mortgage balances. For example, West Virginia's average home equity stake has quadrupled since 2020, reaching $35,931 in 2025. Oklahoma's average home equity increased from $8,766 in 2020 to $46,562 in 2025, reflecting strong growth in both home values and equity.

States with the Least Home Equity Growth

On the other end of the spectrum, Washington D.C. saw a 38 percent decline in average home equity over the same period. Despite having the highest average home prices in the nation, home values in the District only increased by 2.8 percent since 2020, the lowest rate among all regions analyzed. Louisiana is another state where home equity has declined, with a 22 percent drop. Factors such as slower home price growth, increasing insurance costs, and climate-related risks have contributed to this decline.

Alaska, North Dakota, and Colorado also showed minimal growth in home equity, with increases ranging from 17 percent to 48 percent. These states face challenges such as high mortgage balances and slower home value appreciation, which have limited equity growth for many homeowners.

Regional Variations in Home Equity Growth

Southern and Midwestern states have generally outperformed their Western counterparts in terms of home equity growth. Five of the 10 states with the least equity growth are located in the West, where home prices have grown at a slower pace compared to the national average. However, there are exceptions, such as Louisiana and Texas, which have seen notable gains.

In contrast, states like Hawaii, California, and New Jersey have experienced the largest dollar increases in average home equity, even though their percentage gains were smaller. This is because these states already had high equity levels to begin with, making it harder to achieve large percentage increases.

Understanding the Factors Behind Home Equity Growth

Home equity is calculated as the difference between a home’s market value and the remaining mortgage balance. As homeowners pay down their mortgages or as home values increase, their equity grows. Since 2020, the total value of mortgaged homes nationwide has risen by over $10 trillion, far outpacing the growth in mortgage debt. This has resulted in a record-high level of tappable equity, which is the amount homeowners can access while maintaining a 20 percent stake in their homes.

Tappable equity reached approximately $11.6 trillion in 2025, providing homeowners with greater financial flexibility. This includes options such as home equity loans and lines of credit (HELOCs), which can be used for renovations, debt consolidation, or emergency expenses. Many homeowners are considering these tools to take advantage of long-term borrowing opportunities and relatively low interest rates.

The Significance of Home Equity Growth

For many families, home equity represents their largest asset, and its growth has had a significant impact on their financial well-being. Increased home equity allows for greater profits when selling a home and provides more flexibility when purchasing a new one. It also serves as a valuable financial resource, offering borrowing power that can support various life goals, such as education, retirement, or starting a business.

As the housing market continues to evolve, understanding the trends in home equity growth will remain essential for homeowners seeking to maximize their financial potential. Whether through strategic investments, refinancing, or leveraging available equity, homeowners can use this growing asset to build a stronger financial future.