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Home appreciation: what it means

Home appreciation is the increase in your home's value over time. It is one of the two ways your home equity grows, equity being the difference between what the home is worth and what you owe; the other is paying down your mortgage principal.

In Spanish it is

Plusvalía (apreciación)

Also written as: appreciation · home value appreciation

Verified on October 17, 2026

3 official sources

See the whole dictionary

The full explanation

A home's value can go up or down: it can fall because of economic conditions, lack of upkeep or a drop in neighborhood home values, and some markets appreciate faster than others. The FHFA House Price Index (HPI) measures how single-family home values change.

An example

Diego bought his home years ago and has kept it in good shape. Homes in his neighborhood are worth more today, so his equity grew in two ways: through appreciation and through the principal he has paid.

With real numbers

Computed with official data for the whole U.S. In your county the numbers may differ.

Over 5 years: +47%
Over 10 years: +85%

According to FHFA’s price index, the price of the same U.S. homes changed +47% over 5 years and +85% over 10 years, through 2025.

Computed with: FHFA House Price Index (HPI) (2025)

You will see it in…

News and reports about home prices
Your home's appraisal if you refinance or sell
Your county and state pages on this site

Words that go with it

You will rarely see this word alone. These are the ones that show up with it on the same papers.

More guides that use “home appreciation”

Still confused by a paper?

A HUD-approved housing counselor can walk you through it. Agencies usually charge little or nothing, many work in Spanish, and they do not sell you anything.

What a housing counselor does See free help

Official sources

We sum up what these official sources say, in plain words. We add no rules they do not state; when a rule changes, the definition and its date change.

1. Freddie Mac · Understanding your home's equity (external site) · in English · Verified on October 17, 2026
2. CFPB · Mortgages key terms: shared appreciation mortgage (external site) · in English · Verified on October 17, 2026
3. Federal Housing Finance Agency (FHFA) · FHFA House Price Index (external site) · in English · Verified on October 17, 2026