Home equity is driving record growth for American household wealth. Homeowners now have more than $35 trillion in home equity as of the second quarter of 2024, according to Federal data — an all-time high.¹

Moving in (to a higher wealth bracket)

The real estate market has played a huge role in wealth creation in the United States. As home prices soared and mortgage rates fell between 2019 and 2022, the median net worth of U.S. households rose 37% to $192,900, after inflation — the largest increase ever recorded by the Federal Survey of Consumer Finances.²

The median sale price for existing homes rose more than 40% from early 2020 to mid-2022, according to the National Association of Realtors.³ And listing prices are still rising: In July U.S. home prices posted a 5% annual gain, according to the latest S&P CoreLogic Case-Shiller Home Price Index.⁴

Additionally, those with enviably lower mortgage rates are saving big bucks on monthly expenses: The difference between a 3% and 7% mortgage rate is roughly an additional $1,000 on a monthly payment for a typical home.⁵ As a result, many homeowners are staying put longer, reluctant to trade in their lower-fixed rates for new digs.

What’s your zestimate?

Homes are the most-valuable asset owned by Americans under 65 and the second largest for those 65 and over.⁶

Real estate sites like Zillow have tapped into homeowners’ need-to-know (for their own homes and their dream homes) by creating algorithms that provide an estimate of a home’s market value.  Each month, Americans are clocking up to 28,000 Google searches for “Zestimate” – Zillow's signature home valuation tool, which is powered by machine learning and artificial intelligence.⁷

Anecdotally, some homeowners report checking the value of their abode multiple times a week, despite having no plans to sell.⁸ The Zestimate is marketed as a tool designed to demystify home value for consumers — though some brokers argue the algorithms estimates miss some nuance and are off-base. Still, of the 78% homeowners who report knowing the value of their home, nearly a quarter got their information from an online calculator.⁸

Browsing real estate sites has become an online habit for many Americans. One survey found more than half of respondents were spending between 1 and 4 hours per session browsing Zillow, and Empower research shows that 1 in 5 Americans spend time dreamscrolling for their perfect home — and say that looking at purchases they’d like to one day own helps them reach their financial goals.⁹

Tapping into home equity

With home prices building Americans’ net worth, 60% of homeowners are currently sitting on $100,000 or more of tappable equity — the amount most lenders will allow you to take out while still leaving 20% in the property.¹⁰ In fact, equity hit 72.7% in the second quarter of 2024, the highest level since 1958, according to the Federal Reserve.¹¹

Some Americans may be tempted to tap into their homes for cash: A home equity loan allows homeowners to borrow a lump sum of cash against their home equity and make regular repayments, while a home equity line of credit (HELOC) is an open line of credit whereby homeowners borrow a fixed amount on an as needed basis.

If you’re set on leveraging your home equity sooner rather than later, taking out a new HELOC could be advantageous because its adjustable rate could go down if the Fed carries out more rate reductions. Just keep in mind that rates could also rise in the future.¹²