Home Equity Surges to Record High – Here’s How to Put it to Good Use

Blog posted On December 14, 2021

Home price appreciation may be slowing down, but tappable home equity is still reaching new heights. According to the most recent Mortgage Monitor Report by Black Knight, Americans now have $9.4 trillion in tappable home equity. As a result, more homeowners are exchanging their equity for cash.

More than half of all refinances in the third quarter of 2021 were cash-out refinances. In total, homeowners took out $70 billion in tappable equity through cash-out refinances. This shows that Americans are tapping into their home equity at the highest rate in more than 14 years. Just one year ago, homeowners were only taking out $46.3 billion in tappable equity.

“The fact that homeowners pulled out more equity in Q3 than at any point in the last 14 years makes perfect sense, given that rates are still historically low and the last couple of years have seen astronomical home price appreciation,” said Andy Walden, vice president of market research at Black Knight.

Tappable home equity – the amount of equity that you can take out while keeping at least 20% -- is one of the most valuable assets of homeownership. With a cash-out refinance, you can use your tappable home equity to:

  • Consolidate high interest debt
  • Finance home renovations
  • Pay off unexpected expenses
  • Purchase investment properties
  • Finance other costs or invest in anything else!

More people are taking advantage of cash-out refinances now not only to lower their interest-rate, but to make renovations to accommodate for remote work, pay off unexpected medical bills from the pandemic, or consolidate debt. “The ability to truly create a home workspace or to host friends and family other than at the holidays has become more of a trend with the not-so-distant stay-at-home order,” Walden said. “Many others have struggled over the past year racking up thousands of dollars of credit card/revolving debt to keep up with monthly expenses.”

On average, homeowners have each earned more than $53,000 in equity over the past 18 months. What would you do with an extra $53,000? If you’re looking for ideas, or want to know how much equity you have, let us know.

If you want to compare cash-out scenarios, try our loan calculator.


Sources: Black Knight, National Mortgage News, The Mortgage Reports