Homeowners’ wealth may be shrinking as price gains lag inflation

Home prices are rising, which is boosting American homeowners' net worth – though those gains may be eroded by stubbornly high inflation.

Data from Realtor.com showed that median home listing prices were up 0.5% in July from a year ago, though the outlet noted in a report that inflation has outpaced those gains and is up 2.7% year over year.

That dynamic is known as home equity erosion and occurs when the value of a home rises at a pace that isn't enough to keep up with inflation. As inflation rises at a faster rate than a home's value, it weakens the purchasing power of a homeowners' equity in inflation-adjusted terms, which can impact their ability to borrow against equity, conduct renovations or sell their home.

"Your house may still be worth more dollars than before, but those d