What’s the Difference Between Equity and Appreciation?

Equity is the portion of your home you truly own — calculated as the home’s value minus your mortgage balance. Appreciation is the increase in your property’s value over time due to market growth, improvements, or demand.

In my experience, the two work hand in hand. As your property appreciates and your loan balance decreases, your equity grows. This is one of the most powerful aspects of real estate ownership — your home not only provides shelter but also builds wealth passively over time.