It is the difference between what you owe on your mortgage loan(s) and what your house’s market value is. (Other owed amounts, such as debts secured by property liens, can also reduce equity.)
For example, if your house is worth $200,000 & you owe $125,000, your “equity” is $75,000.
This is a different amount than what you would realize at closing if you sold your home because the costs related to the sale of your home (e.g., real estate commissions, real estate transfer taxes, etc.) will be deducted from your net proceeds at closing.