The answer to your question is, depends on your intentions. If you plan to FIRE soon and plan to stay in the house for 10 more years, it is wise to avoid considering the home equity in your withdrawal scenario. You are essentially choosing to have inflated living costs vs a lower COL area, which requires more savings.
Another aspect of your scenario is that you have more than 60 percent of your assets tied up in this house. I would compare this to having your money tied up in a single company (which may have good financials), but only has a single product they sell to a certain demographic in a small geographic area. It may do great, or it may not. Since we tend to be anti debt around here, one advantage to our current economy is often overlooked, ridiculously low long term lending rates. If I were in your shoes (planning to FIRE soon, but living in current home for at least 10 more years), I would consider refinancing and cashing out a portion of my home equity for diversification purposes. A 30 year fixed rate at 3.75% allows you to pull some equity without really changing your FIRE numbers; you can take 4%WR from higher liquid assets to offset higher housing payment. This allows you to diversify your assets into different classes, hence if you get unlucky and the local housing market takes a bit of a shit, the bank shares more of that risk with you. If you get lucky and the housing market continues rising, you get to take advantage of that anyway when you eventually sell. It also provides you with liquidity that you currently do not have.