What is Appreciation?
Appreciation is the increase in a property’s value over time, driven by factors like demand, location, improvements, and inflation. It builds the owner’s equity even without paying down the loan. Real estate has historically appreciated over the long term, though values can also fall.
Example: A home bought for $500,000 is worth $560,000 three years later; that $60,000 of appreciation adds directly to the owner’s equity.