Importance of Home Equity Data and Statistics for Homeowners: Understanding Their Significance
In early 2025, the U.S. housing market has witnessed a significant growth in home equity over the past five years, primarily driven by rising home prices. However, recent trends indicate a slower pace of growth due to factors such as rising mortgage rates and geographical disparities in housing markets.
According to the latest data, U.S. borrowers collectively gained $115 billion in home equity in Q1 2025, representing a 0.7% increase. Yet, the average mortgaged homeowner experienced a year-over-year equity loss of about $4,200, mainly due to weakening markets in some regions, particularly in the South.
Regional variations in home equity gains and losses are evident. States like Rhode Island, New Jersey, and Connecticut saw substantial equity gains, with increases of $37,000, $36,000, and $35,000, respectively. In contrast, states such as Hawaii, Florida, and Texas experienced significant equity losses.
Tappable equity, the amount homeowners can borrow against their homes while maintaining at least a 20% equity stake, has grown by $5.7 trillion over the past five years, a 100% increase. The average tappable equity per borrower increased by nearly $102,000.
Although specific data on "equity-rich" homes (those with a loan-to-value ratio of 50% or less) is not detailed in recent reports, nearly half (46.2%) of mortgaged residences are in this category.
Home equity lending, including Home Equity Line of Credit (HELOC) and home equity loans, has seen some changes. HELOC rates have held steady, while home equity loan rates have risen slightly, reflecting a cautious lending environment amidst rising mortgage rates. The rise in mortgage rates, nearing 7% in mid-May 2025, has impacted buyer interest and affordability, potentially affecting demand for home equity loans.
The U.S. housing market is experiencing a leveling off in price growth, with rising mortgage rates affecting buyer demand. Despite this, home equity remains a valuable asset for homeowners, with significant regional variations in equity growth and stability.
Understanding how home equity works and how to leverage it is important for homeowners, as it can help build long-term wealth and remains a significant part of the American Dream. Negative equity, a situation where a homeowner owes more on their mortgage than their home is worth, can be problematic, preventing homeowners from selling their property without incurring costs or from refinancing, home equity loans, or HELOCs due to a lack of equity in their home.
American homeowners have gained significant wealth, averaging nearly $150,000 over the past five years, according to the National Association of Realtors (NAR). As of Q1 2025, the collective value of U.S. households' equity is $34.5 trillion.
Additional reporting by Maya Dollarhide. Homeowners in Rhode Island, New Jersey, Massachusetts, Maine, Connecticut, and District of Columbia have seen especially large gains in their equity levels as of Q1 2025. Home equity lending has increased to its highest level since early 2008. Staying attuned to local market trends can help increase your home's equity without your intervention, as certain neighborhoods, cities, and regions become more attractive, elevating asking prices and property values.
Personally managing one's home equity can be beneficial for engaging in real-estate investing and boosting personal-finance. With the steady increase in tappable equity, homeowners can explore finance opportunities, such as home equity loans or Home Equity Line of Credit (HELOC). Despite the recent slowdown in home equity growth due to mounting mortgage rates and geographical disparities, many homeowners are still gaining substantial equity, particularly in states like Rhode Island, New Jersey, and Connecticut. Yet, it's essential to recognize potential risks like negative equity, which may limit refinancing options or prevent selling a property without incurring costs.
