Buying a house continues to pay off for millions of U.S. homeowners, federal data released this week suggests.
Homes, particularly those in small-town America, have been appreciating over the past five years, according to data the Federal Housing Finance Agency released this week. Meanwhile, the total equity American homeowners amassed grew nearly 72% during the same five-year period, according to the Federal Reserve Bank of St. Louis.
Total home equity grew from $20.1 trillion in the first quarter of 2020 to $34.5 trillion in the first quarter of 2025, the Fed said Thursday.
Home equity is the mathematical difference between how much a homeowner has paid down on a mortgage and the property's current value. For example, let's say you bought a home in 2009 for $100,000, but today it has grown in value to $255,000. Take that $255,000 and subtract whatever the remaining balance is on the mortgage — perhaps $55,000. If the remaining balance is $55,000 and the home is worth $255,000 today, then the homeowner has $200,000 in equity.
An equity amount typically grows as a homeowner pays off the mortgage incrementally and the property's value rises over time.
On appreciation, Georgia and North Carolina lead the charge
On the appreciation front, small towns in the South were the stars of the show. Hinesville, Georgia, a military city about 45 miles southwest of Savannah, led the nation with a 90.1% increase from the first quarter of 2020 through the first quarter of 2025, FHFA data shows. Pinehurst, North Carolina, was second at 88%, while Knoxville, Tennessee, was third at 87.4%.
The top 10 markets for price appreciation all had growth rates of at least 80%, with eight of those 10 in the Sun Belt.
"The U.S. economy is slowly but surely moving into the Sun Belt states," Ken Johnson, a finance professor at the University of Mississippi, told Homes.com. "The economic conditions for growth can be found more in those states than in others, but there are exceptions."
One of those exceptions is Louisiana. Of the nation's 10 bottom-ranked markets for price appreciation since the onset of the COVID-19 pandemic in 2020, seven are in the Pelican State. Lake Charles' 16.7% increase was the lowest in the nation, with Alexandria, Louisiana, and New Orleans tied for the second lowest at 20.7%.
Economic and environmental challenges have slowed Louisiana's home price growth, according to Erika Ludvigsen, national director of residential analytics for Homes.com.
"The state's heavy reliance on the oil and gas industry has limited economic growth and diversification," she said in an email. "Frequent hurricanes and rising flood insurance costs have further dampened housing demand. In addition, a decline in population and weak in-migration trends have reduced demand for housing."
Home price growth is slowing
Over the past year, home prices increased in all 50 states and Washington D.C., but the growth is slowing as more listings hit the market and mortgage rates remain persistently elevated.
Overall, U.S. house prices rose 4.7% in the first quarter compared to a year ago, but that's lower than the previous quarter's annual rate of 5.5%.
