The Truth About Home Equity Headlines

Early 2023 headlines warned about “negative equity.” Here’s why the short-term view misses the long-term picture for most DC-area homeowners.
Gold line illustration of a newspaper beside a rising equity line

Originally published January 17, 2023. For the latest numbers, read More Homes, More Room to Negotiate: The DMV Housing Market This Fall.

Home equity was a hot topic in early 2023, and if you followed the news, you probably heard that a growing number of homeowners had “negative equity.” Don’t let those headlines scare you. They don’t give you all the information you need to understand what’s happening, or at what scale.

Headlines focus on the short term

If you’re deciding whether to move this year, look at the long-term view. In our area, the average sold price had appreciated about 57% over the previous 10 years, so homeowners who’ve been in place for a while often have substantial equity to work with.

The DC area also tends to have steadier housing demand than many other US cities. Rather than basing your decision on national news, look at current and long-term trends in your own neighborhood.

Wardman Insight
Owning a home is a long-term investment, not a short-term play.
The longer you own, the more equity you typically build through appreciation and paying down your loan.

What about recent buyers?

Homeowners who bought in 2022 may not have built much equity yet. That’s normal. Equity grows as you pay down your loan and as home values rise over time, and most recent buyers aren’t planning to sell right away anyway. When headlines focus on the short term, they miss that context.

Find out how much equity you have

Want to know what your home is worth today and how your equity could help you buy your next one? Contact our team for a free equity assessment.

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