Guidesfrom the federal index
Does the Area Level Change My Home Equity Estimate? ZIP vs State Index
Equity is value minus balance, but the area index you pick moves the value. One 2014 Austin purchase gives $422,407 on a ZIP index and $500,230 on Texas.
Your equity estimate is the indexed value minus your loan balance, and only the value depends on which FHFA index you pick. The balance is the same either way, so the whole gap between a ZIP-level and a state-level estimate lands in your equity, dollar for dollar.
The worked example below is a $310,000 purchase in March 2014 in ZIP 78704 (Austin, Texas), with $62,000 down on a $248,000 30-year fixed loan at 4.50%. The balance is $182,405 after 150 payments, as of September 2026. The two estimates are $422,407 and $500,230 of equity.
What changes and what does not
Equity here is the value from the index minus the balance from the amortization schedule. The Home Equity Since Purchase Calculator computes both parts, and How Much Equity Do I Have in My Home? walks through the split into down payment, appreciation and principal paid.
- The balance comes from your price, down payment, rate and term. After 150 payments on the loan above, it is $182,405, and $65,595 of principal has been paid. No index touches it.
- The value is the purchase price times the index at the end divided by the index at purchase. A different area level means a different index series, so a different factor.
The same purchase on two indexes
| ZIP 78704 | Texas | |
|---|---|---|
| FHFA series | Annual ZIP index (developmental) | Quarterly state index |
| Window | 2014 to 2025 | 2014 Q1 to 2026 Q2 |
| Index at purchase | 1529.73 | 241.28 |
| Index now | 2984.51 | 531.31 |
| Change | +95.1% (6.3% a year) | +120.2% (6.7% a year) |
| $310,000 becomes | $604,811 | $682,635 |
Both columns use FHFA's all-transactions index, not seasonally adjusted. Subtract the same $182,405 balance from each value:
| ZIP 78704 | Texas | |
|---|---|---|
| Value now | $604,811 | $682,635 |
| Balance, September 2026 | $182,405 | $182,405 |
| Equity | $422,407 | $500,230 |
| Down payment | $62,000 | $62,000 |
| Appreciation | $294,811 | $372,635 |
| Principal paid | $65,595 | $65,595 |
The Texas estimate is $77,823 higher than the ZIP estimate. The two values differ by $77,824; the dollar of difference is rounding in the balance. Down payment and principal paid are identical in both columns, so the whole difference sits in the appreciation line: $372,635 against $294,811.
Why the two indexes disagree
Two things differ at once, and the table does not separate them.
- Area. The state index averages every part of Texas, and the ZIP index follows one Austin ZIP. Over 2014 to 2025 the ZIP index rose 95.1%; the Texas index rose 120.2% over a window that runs to 2026 Q2.
- Window. The ZIP series is annual and ends in 2025, with the county and ZIP files dated March 31, 2026. The state series is quarterly and ends 2026 Q2. The Texas window ends later, so it includes the first half of 2026 that the ZIP series does not yet have.
Neither number is the right one in a way the other is wrong. The ZIP figure is closer to where the home is, and FHFA says of its annual index for small areas, "This index should be considered developmental" (FHFA HPI FAQ). The state figure is a broader quarterly series. The site's order for picking an area is ZIP, then county, then metro, then state, and each result names the level it used.
What equity share tells you
On the ZIP estimate, equity is 70% of value, with a loan balance of $182,405 against $604,811. The thresholds for dropping mortgage insurance are a separate question, covered in When Can I Cancel PMI?.
What this does not tell you
- The index tracks the area, not your house. Renovations, condition and lot size are ignored.
- FHFA describes its flagship purchase-only index as built from "conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac" (FHFA HPI FAQ), so sales outside those loans, such as cash, jumbo, FHA and VA sales, are not what that series measures.
- It is not an appraisal. A lender, an appraiser or an actual sale can come out well away from either estimate.
- The loan balance assumes a fixed-rate loan with scheduled payments only: no extra principal, no refinance, no second loan.
- Informational only, not an appraisal or financial advice.
Run your own price, month, ZIP and loan terms through the Home Equity Since Purchase Calculator to see the value, the balance and the three-part split for your home.
Sources
- FHFA House Price Index datasets: the ZIP, county, state and metro files used for the index values above.
- FHFA HPI frequently asked questions: the developmental annual index and the mortgage basis of the flagship index.
Sources
This guide is for informational purposes only. It is not an appraisal, and not financial, tax, lending or real-estate advice. Every estimate on this site tracks an area’s average, never a particular house. Confirm anything that matters with a licensed appraiser or your lender.
Last reviewed: November 2026 · Against the sources cited in the body.