Net worth is the value of the house minus the value of the remaining mortgage. If your house is worth 700, 000 and your mortgage is still 500,000– the value going into your net worth is only $200,000.
We owned a beautiful house when we lived in California. But our net worth never matched the value of the house because we had a 30 year mortgage on it. Like all mortgages, you don’t own most of the house until you get near the end of the 30.