Importance of home equity data and statistics for homeowners: Reason behind their significance
In the real estate market of the United States, homeowners are currently benefiting from a significant surge in home equity, according to recent statistics. The national median home price has risen substantially, reaching over $420,000 as of May 2025, marking a significant increase from $280,000 in May 2020 [1]. This price escalation has led to higher home equity values for homeowners across the nation.
The total tappable equity has grown by an impressive $5.7 trillion over the past five years, with the average tappable equity per borrower increasing by nearly $102,000 [1]. States like Rhode Island, New Jersey, Massachusetts, Maine, Connecticut, and the District of Columbia have witnessed notable gains in home equity [1].
While specific data on the percentage of "equity rich" homes (defined as having at least 50% equity in their home) is not readily available, the significant equity growth suggests that many homeowners are in this category. However, the exact figures are not detailed in the current data.
The increase in tappable equity indicates a potential rise in home equity lending, but specific statistics on this increase are not provided in the available data. The recent stability of mortgage rates around 6.7% to 6.8% may influence lending decisions, although the impact on home equity lending specifically is not highlighted [2][3].
Home prices are projected to rise modestly by about 1% in 2025 before potentially increasing by 4% in 2026, according to the National Association of Realtors [5]. Rising housing inventories and potentially more price drops could offer buyers more bargaining power, which might influence the home equity market.
Despite the positive trends, negative equity remains a concern for some homeowners. The national aggregate value of negative equity is $350 billion, and according to the Cotality Homeowner Equity Report, there are currently 1.2 million homes with negative equity [4]. Understanding home equity and how to leverage it is crucial for any homeowner, as homeowners with negative equity (also known as being underwater or upside down) owe more on their mortgage than their home is worth.
If a homeowner sells a property with negative equity, they would not make enough from the deal to pay off their mortgage and would have to pay the lender the difference at closing. Refinancing with negative equity is also problematic, as lenders usually won't let you take out a new loan without any equity in your home.
Home equity loans or HELOCs cannot be borrowed against when there is no equity in the home. Monthly mortgage payments, however, allow homeowners to acquire an asset that can be tapped into or passed down to descendants. The average mortgage-holding homeowner has approximately $302,000 in equity, with $195,000 being tappable [4].
Underwater properties represent 2.1% of all mortgaged residences, and homeowners in Rhode Island, New Jersey, and Maine experienced the largest year-over-year home equity gains [1]. On the other hand, homeowners in Hawaii, Washington, and Arizona experienced the biggest annual equity losses [4].
In conclusion, while homeowners in the U.S. are experiencing significant growth in home equity, negative equity remains a concern for some. Understanding the home equity market and how to manage it effectively is crucial for homeowners seeking to make the most of their real estate investments.
Sources: [1] https://www.realtor.com/news/trends/median-home-price-up-7-8-in-may-2025/ [2] https://fred.stlouisfed.org/series/MORTGAGE30USQP [3] https://www.cnbc.com/2022/06/22/mortgage-rates-today-june-22-2022.html [4] https://www.cotality.com/homeowner-equity-report/ [5] https://www.nar.realtor/newsroom/existing-home-sales-expected-to-fall-in-2025-but-modest-price-growth-will-persist
- As the average tappable equity per borrower increases by nearly $102,000 over the past five years, personal finance experts recommend exploring opportunities in investing excess home equity in various financial instruments, such as real-estate as it may improve overall financial standing.
- In the context of real-estate, understanding the home equity market is critical for any homeowner, as managing home equity effectively can lead to potential investing opportunities in real estate, while simultaneously mitigating risks associated with negative equity.
