I'm interested in tracking my net worth as a way of measuring progress and I'd like to include home equity in my net worth. How are you tracking home equity? Are you using purchase price? Average home price? How often do you update your home's value? Only with an appraisal? Based on Zillow (which seems to fluctuate too much)?

7 Answers 7


I value my home at slightly below (say, less 8-10%) of comparable, recent sales in my neighborhood. I do this for a couple of reasons:

  • I wouldn't expect to get the best price at any peak. Wishful thinking. And,

  • Actually realizing any money from a sale would involve real estate commissions, moving fees, legal fees, etc.

I never guess. If I cannot find a comparable sale, I leave the home value as-is until there is data.

  • Apart from commissions and fees, it would also include taxes, correct?
    – Victor123
    Commented Mar 24, 2015 at 17:27
  • 3
    @Victor123 Taxes vary. Rather than use my example ballpark reduction, folks ought to come up with their own estimate based on what taxes would apply within their particular municipality, and based on the kind of property being sold (principal residence, or investment property) etc. Commented Mar 24, 2015 at 20:21
  • Do you apply a factor to your tax-deferred retirement accounts, to account for the deferred taxes you'd have to pay to realize money from them? Do you also apply an additional 10% penalty that you'd have to pay to realize money from them today (assuming you're currently younger than 59.5)?
    – stannius
    Commented Oct 6, 2016 at 20:10
  • 4
    @stannius No, I don't. (p.s. "younger than 59.5" implies tax rules that presume I'm an American -- but I'm Canadian. Sorry, eh? ;) Commented Oct 6, 2016 at 22:12

It's not a liquid assest, so current valuation isn't really something you should track too closely until you're ready to move.

I'd valuate the place every 3-5 years based on comparale sales. Anything less than that and you're either going to feel like a chump when someone gets foreclosed on or like a genius when houses start going up. Both feelings are dangerous from a financial POV.


What about using the assessed tax value? Where I live the county taxes the value of my home so they calculate what they consider it to be worth periodically.

  • 4
    That's a useful approximation if you have nothing better, but most homes are selling for well under tax value these days.
    – C. Ross
    Commented Aug 9, 2010 at 13:51
  • 4
    @C.Ross it depends on the jurisdiction, and of course the cycle of the economy. Even back in 2010 that observation was not universally true.
    – stannius
    Commented Oct 6, 2016 at 20:11

I think it depends on how you want it to show up in your finances.

For the first few years of my personal finances, I didn't bother even counting my house at all, but I did track the loan on it. So my software just always showed me with a huge negative net worth, which I just ignored.

When I decided to add in the house (mainly because of the always-present annoying red negative net worth in my financial software), I just put it in at purchase price. Today, that is way more than what I'd see if I were to sell it, but it doesn't really matter.

It doesn't matter because my house is not an investment. I don't want fluctuations in the housing market affecting my view of "net worth progress". I want my "net worth" as reported by my books to reflect the result of income, expenses, and investment variations. Since my home isn't any of those, I don't want home market fluctuations overshadowing the real work I'm doing.

If my house was an investment, then I definitely would track its value much more closely. As it is now, I'll probably update it once every few years to whatever I feel the fair market value is. That way it won't get out of date too much, but will stay constant most of the time. I am considering selling in 15 years or so; as that time draws closer, I'll probably bring the asset value more in-line with reality.

  • 2
    Even if you don't consider your home an investment, it is an investment. That is, even if you're never looking to sell your house in order to gain from appreciation, you should still consider it as such. I.e. don't let it fall apart and always consider home improvements, even if they are simply designed to increase its value. Commented Aug 9, 2010 at 16:40
  • @George: I've read in several places that the only "investment" you can put into a house that will yield full value when sold is paint and lighting. YMMV if you're a hardcore DIYer. A house is primarily an expense.
    – bstpierre
    Commented Aug 10, 2010 at 0:42
  • @bstpierre You make a fair point (though it's not as cut-and-dry as car ownership). Being a hardcore DIYer, that is the situation I had in mind. If you hire contractors, it could certainly be difficult, if not impossible, to get/maintain full value once you sell the house. Consider though, that you're also extracting value by making use of the house. Regardless, you should consider opportunities to increase the value of your house. This begins when you purchase it. If you buy a money pit, you can't expect to get much value out of it when it comes time to sell. Commented Aug 10, 2010 at 4:14

My answer is similar to Steve's. When I create my balance sheet on Excel, the net worth removes the full value of the house. i.e it ignores the house value but includes the mortgage as a negative. In other words, if I told you my net worth is $X, it's really $X plus a fully paid home. I do this for one reason. When we retire, and apply the 4% rule, the house can't be counted, it's not like we plan to rent out a room.

On the other hand, I do understand those who are moving, from a high cost area such as L.A. or New York to the midwest and know they can replace their house and pocket some money. In my retirement planning I ignore this as well as Social Security and any potential inheritance.

  • " I do this for one reason. When we retire, and apply the 4% rule, the house can't be counted, it's not like we plan to rent out a room." That seems odd. Why not group all retirement accounts together in the s/s and calculate retirement off of that?
    – RonJohn
    Commented Jan 22, 2020 at 16:09
  • Yes, in effect that's what I do. The only point I was trying to make in my answer was that I ignore home equity for purposes of "net worth" as it pertains to retirement. Commented Jan 22, 2020 at 16:24

In my state, the great State of Michigan, I get a letter from the city tax assessor that shows, among other things, the "assessed value" of my home. The state defines this value to be 50% of the market value of the house.

So, I just take that value (the assessed value) and double it.


If you truly want to include the value of your house in your net worth, be sure to subtract the costs of selling it (broker commission, spiffing it up to make it more attractive to potential buyers, an estimate of the value of your time and the hassle to sell it) and all the costs of buying or renting a new abode (which I will not list). It is not inconceivable that the net proceeds from selling your current house will be small or even negative when all costs of selling and buying and moving are taken into account.

You might arrive at an inflated value of your net worth if you include the value of your current abode, unless you know that you will be downsizing when/if you move.

Much better to be pleasantly surprised when/if you sell your house and move than to be horrified.

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