You’ve probably heard that many homeowners today have built up significant equity—but what does that actually mean? Let’s take a closer look. Home equity isn’t just a figure on paper; it’s a valuable asset that can open the door to your next big move.
How Much Equity Does the Typical Homeowner Have?
Equity grows over time as mortgage balances decline and property values appreciate. The result is a larger ownership stake in your home.
Current data from the Census Bureau and ATTOM reveals that nearly two-thirds of homeowners have accumulated substantial equity.
39% have no mortgage at all, and an additional 27% hold 50% or more equity (see chart below):
That’s significant. To put it into perspective in real dollar terms, data from Cotality indicates the typical homeowner currently holds nearly $300,000 in equity—a six-figure asset. Whether your equity is above, below, or right around that level, it can be a powerful financial resource. Here are several ways homeowners are leveraging it today.
Ways You Could Use Your Home Equity
1. Move Into a Home That Better Fits Your Life
As your lifestyle evolves, your housing needs often change as well. Perhaps your current home no longer offers enough space, or maybe it provides more than you need now that your children have moved out. In either case, your equity can be leveraged as a down payment on a home that better aligns with your present and future goals. In some situations, homeowners even have enough equity to purchase their next property outright.
2. Upgrade Your Current Home
If you’re not planning to move anytime soon, you may choose to reinvest your equity into your current home. Strategic upgrades—such as modernizing a kitchen or updating bathrooms—can enhance both your enjoyment now and your property’s value when you decide to sell. Before starting any major projects, it’s wise to consult with a real estate professional who can help you prioritize improvements most likely to deliver the strongest return.
3. Fund a Major Life Goal
Home equity can also serve as a valuable resource for achieving broader financial goals—whether that means launching a business, strengthening your retirement savings, covering education expenses, or supporting someone close to you. Many homeowners today are even using a portion of their equity to help loved ones with a down payment on a home.
4. Avoid Foreclosure in Tough Times
If you’re facing financial challenges, your equity can serve as an important safety net. Homeowners in difficult situations may be able to sell their property and retain proceeds, rather than risk foreclosure. If this is a concern, speaking with a real estate professional can help you understand your options and how your equity may support a more stable outcome.
Your Next Steps
If you’re considering putting your equity to work for any of these purposes, here’s a smart way to begin:
Step 1: Request a personalized equity analysis from a local real estate professional. Step 2: Consult a financial advisor to explore the best strategies for using it.
When leveraging equity, it’s important to keep key factors in mind—especially maintaining a healthy loan-to-value (LTV) ratio.
As a general guideline, homeowners should aim to retain at least 20% equity as a financial cushion, a safeguard many overlooked prior to the 2008 housing downturn.
The encouraging news is that recent data from Intercontinental Exchange shows most homeowners today still meet or exceed that benchmark.
“As of Q4, mortgage holders have $17.3T in home equity, including $11.2T in tappable equity ‒ accessible via cash-out refinances or home equity lines while maintaining 20% equity in the property . . . ”
Bottom Line
Your home equity is likely one of your most valuable financial assets. Whether you’re considering a move, planning renovations, or pursuing a major life goal, it’s worth taking the time to understand how you can put it to work for you. Connecting with a financial advisor can help you explore the possibilities and make informed decisions.
What’s one goal you would pursue today if the funding were readily available?
