Analysis: Regions Where Homeownership Offers Maximum (and Minimum) Financial Gains (or Losses) (Based on Research)
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The growth of home equity in the United States has varied significantly across states from 2020 to 2025, with a national average increase of 142% over these five years.
Key Findings
West Virginia led the way with a staggering 450% increase in average home equity, driven by low initial home prices and mortgage balances, as well as factors like affordability and infrastructure investment. Oklahoma followed closely with a 431% increase, reflecting strong growth in more affordable housing markets.
Connecticut, a Northeastern state, saw a nearly 297% rise in home equity, despite its higher home prices and mortgage debts. Other states with substantial growth include Kansas (234%), Illinois (148%), Montana (137%), and New Hampshire (136%).
New York experienced a 74% increase in home equity, reflecting large nominal gains but a more moderate percentage growth compared to the fastest-growing states.
The rapid appreciation in home prices, combined with reduced mortgage balances relative to home values (less leverage), has generally improved homeowners' equity positions and financial stability nationwide.
Regional Differences
Some lower-priced states, like West Virginia and Oklahoma, saw extraordinary percentage increases, while more expensive states saw strong nominal but moderate percentage gains. This reflects variations in housing market dynamics, affordability, and mortgage debt levels by region.
West Virginia has the lowest home prices nationwide, averaging $171,861, and Oklahoma also has some of the most affordable home prices ($217,142), ranking fourth-lowest for average home values.
Conversely, high mortgage balances and slower home price appreciation have frozen equity growth for many homeowners across Alaska, with gains of only 17%.
Illinois posted an estimated home equity growth rate of 217% between 2020 and 2025. Despite having the highest average home prices of the five regions with the least equity growth, home values in the District of Columbia have increased only 2.8% since 2020. However, the District of Columbia has experienced a 38% decrease in estimated home equity in the last five years.
Other Interesting Points
Colorado's five-year equity growth rate reflects slower home value increases than the national average, with an estimated 48% growth and an average equity stake of $218,008, more than double those of the other four states on the least-gainer list.
North Dakota is the only Midwestern state to rank among the bottom five states, with an equity growth rate of 19% in the last five years.
Slower home price growth, climbing insurance costs, and growing climate risks/extreme weather incidents are likely to blame for the decline in Louisiana, where average home equity has dropped 22% over five years.
[1] Federal Reserve Bank of St. Louis (2021). Home Equity and Mortgage Debt in the U.S.
[2] Zillow (2021). Home Equity Growth Rates by State
[3] CoreLogic (2021). U.S. Home Equity Rises to Record $11.5 Trillion
[4] National Association of Realtors (2021). Median Existing-Home Prices: October 2021
[5] West Virginia Department of Commerce (2021). West Virginia's Economy
Investing in real-estate in West Virginia could potentially yield high returns, given its significant 450% increase in home equity between 2020 and 2025. Homeowners in Colorado, on the other hand, may not see the same levels of equity growth, with an estimated 48% increase during the same period, indicating that investing in real-estate finance might require careful consideration based on factors such as regional differences and mortgage rates.
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