What’s the Difference Between Market Value and Assessed Value?

1. Market Value Is What a Buyer Will Pay

Market value is the price your home would likely sell for in today’s market. It’s determined by:

  • Location and neighborhood trends
  • The condition and features of the home
  • Comparable recent sales (comps)

Appraisers, real estate agents, and buyers all use market value as the real-time price tag of your home. This is the number that matters most when buying or selling.

Want to know your home’s current market value? Get a Free Home Evaluation to see what comparable homes in your area have recently sold for and get a professional estimate based on real market data.

2. Assessed Value Is Used for Property Taxes

Assessed value is set by your local government and is typically used to calculate your annual property taxes. It’s based on:

  • A percentage of market value (called an “assessment ratio”)
  • Adjustments made by the city or county
  • Local government formulas—not the open market

It’s often lower than market value, and if you think your assessed value is too high, you can often appeal it to lower your taxes.

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Property taxes directly affect your monthly housing cost. Calculate your Conventional Purchase Loan Payment now to see how property taxes based on assessed value factor into your total monthly mortgage payment and escrow account.

3. Know Both to Be a Smart Buyer (and Homeowner)

✅ Use market value when negotiating price, comparing homes, or applying for a mortgage
✅ Watch assessed value when estimating property taxes or reviewing your escrow account

Understanding both helps you plan smarter—whether you’re buying, budgeting, or building equity.

Planning to sell your current home and buy another? Calculate your Bridge Loan, Capital Gains Tax Exclusion & Payment Recast now to understand how market value affects your equity position and tax implications when moving to your next home.

Ready to explore your complete home buying or selling strategy? Visit our Buy a House page or Sell a House page for comprehensive resources about valuations, negotiations, and making smart financial decisions.

Want to Know What Your Home Is Really Worth—and What You’ll Be Taxed On?

At Stairway Mortgage, we give you the tools to buy smarter—because knowing your numbers is the first step to growing wealth.

📘 Download our homebuyer guides about property valuations.

🏠 Get a Free Home Evaluation for current market value.

📊 Check Current Rates and calculate total costs.

🧮 Plan your budget with our Conventional Purchase Calculator.

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