Michael Micheletti 
Key Takeaways
- American homeowners are sitting on near record home equity after above-average appreciation.
- The cost of living and homeownership has risen steadily as well, but still, utilization of home equity remains low.
- It’s time to think of home equity as more than a number, and as an important financial tool that can take care of what matters most today.
That’s the amount of equity locked up in American homes. You’ll hear that in the opening line of our new campaign. It’s a staggering number and, for many, it’s just sitting there as accumulated wealth trapped in their home, not being used for today’s needs and opportunities.
Let’s look at the landscape. Home prices have climbed steadily since the pandemic, and even more significantly since the financial crash of 2008—but the reality for homeowners has also changed drastically. The rising cost of living and homeownership in recent years has brought all new challenges. If you think of household budgets as a pie chart, where every slice is growing, from everyday essentials to childcare, property taxes, and insurance premiums, the problem many homeowners face today is bigger than housing costs alone.
A Foundation for the Future
But here’s the silver lining. As home prices have increased, home equity has too, to the tune of nearly $300,000 per average household by recent estimates. The Federal Reserve reports that the largest asset—even more than retirement and investment accounts—in most Americans’ portfolio is their home, making up at least 30% of their total net worth.
It’s a reminder that owning a home is still the biggest building block of wealth for everyday Americans (backed up by our recent survey in which 77% of homeowners agreed).
At Unlock, we believe home equity can be a foundation for the future, and the ability to build upon what’s already yours should be available to more homeowners. It’s about having options and the opportunity to plan for what’s next.
That was the central message we wanted to share with homeowners in our latest campaign.
Homeownership represents stability, independence and accomplishment, but many people still view their home equity as something that shouldn’t be leveraged. Even now, with near-record high equity levels, American homeowners accessed between just .4% and .5% of total tappable equity each quarter last year.. And when they do choose to access it, they’ve been limited to a narrow suite of traditional loan products such as home equity lines of credits or closed end second lien loans.
Embracing New Options
It’s time to change that mindset and to provide homeowners with more options. Why should home equity be left untouched, if it could work for you, your family and your future right now? Once homeowners feel empowered to access the value of their homes, and have more ways to do it, home equity becomes more than just a number on paper. It becomes an important financial tool to take care of what matters most to homeowners – whatever that may be.
I firmly believe this because of what Unlock homeowners have told us directly. When we surveyed them about the impact of their home equity agreements, more than 8 in 10 (82%) reported achieving their primary financial goal with their HEA funds – and 72% of them did so within just three months of funding. Beyond that, 84% of Unlock homeowners report better financial health and behaviors post-funding.
As with every financial decision, homeowners need to do the research and carefully assess if equity financing is right for them. It may not be. But isn’t it time to at least ask if your home’s value is better left untouched? Or whether it could be used today to help with real financial needs and opportunities?
There’s $30 trillion in home equity. Let’s unlock yours.
