Your House Made You $200,000 on Paper — Where Did All That Money Actually Go?

A $200,000 increase in home value does not equal $200,000 in spendable cash because mortgage balances, selling expenses, and potential taxes can reduce the amount a homeowner ultimately keeps – Shutterstock

Your house gained $200,000 in value, according to the latest estimate, and suddenly it looks like the family home moonlighted as an investment portfolio. There is just one tiny problem: that $200,000 probably isn’t sitting in a checking account waiting for a weekend splurge.

Home value and spendable money are two very different things. A rising property value can increase household wealth and build equity, but homeowners generally cannot turn that paper gain into cash without selling, borrowing against the property, or otherwise tapping the equity.