Are You Sitting on a Goldmine in Home Equity?
Author
Aidan BelewDate Published

With record levels of home equity accumulated by U.S. homeowners, the spotlight is on the potential to tap into this wealth. Upcoming rate cuts could make accessing this equity more affordable than ever, presenting an opportunity for homeowners to reevaluate their financial position and consider leveraging their equity for investments, particularly in real estate.
The Numbers Behind the Equity Boom
As of the end of Q3 2024, according to ICE’s Could anticipated rate cuts lead to more home equity lending, Americans with mortgages held a staggering $17.2 trillion in home equity, with $11.2 trillion of that considered tappable. This means the average mortgage holder could access approximately $207,000 without dipping below a healthy 20% equity stake in their property.
The report continues by forecasting a brighter future despite a slowdown in equity growth, this figure marks a seasonally adjusted record high. Additionally, the total outstanding mortgage debt represents just 45% of the value of underlying homes—a far cry from the 30-year average of 58%, highlighting the strength of homeowners' positions.
Interestingly, the report states homeowners have been conservative in tapping into their equity. Only 0.42% of available tappable equity was withdrawn in Q3 2024, significantly below the past decade’s average extraction rate of 0.92%. This hesitance has left nearly half a trillion dollars of potential economic activity untapped over the last ten quarters.
Elevated borrowing costs have played a key role in this trend. According to a report from ICE Mortgage Technology, "The monthly payment to withdraw $50,000 via a second lien HELOC more than doubled, from $167 in March 2022 to $413 in January 2024." This sharp rise in payments has kept many homeowners on the sidelines, despite the opportunities available.
Assessing and Deploying Equity for Investments
As rate cuts are anticipated in the coming quarters, the outlook for home equity lending is improving. ICE Mortgage Technology projects that "second lien HELOC rates could fall into the mid-7% range by late 2025," potentially reducing borrowing costs by 25%. This shift could create a more attractive environment for homeowners to deploy their equity.
Our belief at okood is that some of this equity will be deployed to invest in real estate. Danielle Hale, chief economist at Realtor.com, notes, “For buyers interested in investing in rental properties or other real estate, it’s key to know which areas are both affordable and in high demand to capitalize on any investment opportunities, especially with today’s higher prices and rates.”
For those considering tapping into their equity, now is the time to assess their property’s financial position. Tools like equity calculators and consultations with financial advisors can provide clarity on how much tappable equity is available. As homeowners evaluate their options, the potential to use this wealth for real estate investments, such as rental properties or flipping homes, becomes increasingly viable.
"Homeowners are in a better position than ever to leverage their equity strategically," says one industry expert. "By understanding their property's financial standing, they can confidently make investments that have the potential to yield significant returns."
Final Thoughts: Unlocking the Potential
Whether you’re planning home renovations, consolidating debt, or entering the real estate investment market, your home equity could be a powerful tool. With rate cuts on the horizon, tapping into this resource may soon become more affordable. The key is to approach equity deployment with a clear strategy—evaluating both your financial position and the investment opportunities available. okood will make this process seamless by providing personalized insights and tools to help you make informed decisions. With okood, you will be able to confidently unlock your home equity's potential and achieve your financial goals.