Accessing the hidden value in your home: Why 2025 is the year to act

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Accessing the hidden value in your home: Why 2025 is the year to act

For many homeowners, the past few years have felt like a tug-of-war between soaring property values and rising financial pressures. In 2025, this tension has only intensified. Interest rates remain high, living costs continue to climb, and credit card debt is weighing heavily on households. Yet, many families have a powerful tool sitting under their roofs — the equity they’ve built as home values climbed.

Several converging factors make 2025 a particularly strategic time for homeowners to consider accessing their home equity, Splitero reports.

Homeowners have a record $17.8 trillion in home equity

Homeowners have amassed record amounts of home equity in the last few years, partly due to the COVID-19 pandemic and the lack of supply. According to data from the ICE Mortgage Monitor August 2025 report, homeowners entered Q3 2025 with a staggering $17.8 trillion in accessible home equity, including $11.6 trillion in equity that can be accessed while maintaining a 20%. Homeowners were sitting on just $6 trillion in 2020.

What exactly is home equity? Home equity represents the market value of your property minus the current balance of any loans or lines of credit secured by your home.

Here is a simple calculation: if your home’s current value is $500,000 and your mortgage balance is $300,000, your home equity would be $200,000.

Lock-in effect: High interest rates and lack of supply are driving home costs, but increasing home values

One of the strongest forces shaping today’s market is the persistence of elevated mortgage rates. The average 30-year fixed mortgage still hovers in the 6-7% range. For families considering moving, repurchasing a home would come with far steeper monthly payments than the ultra-low mortgages they locked in during COVID-19.

For example, if you purchase a $500,000 home with a 20% down payment and a 3% interest rate, your monthly payment will be roughly $1,686 in principal and interest. If you purchase the same-priced home today with the same amount down at a 7% interest rate, your monthly payment jumps to roughly $2,661. That difference is about $975 per month or about $11,700 per year.

As a result, many homeowners are “locked-in” in place. Selling and buying again just doesn’t pencil out financially. That’s why the focus has shifted from moving to maximizing the value of the home you already own.

Consequently, the number of available homes for sale has plummeted.

Housing starts, a measure of new-home construction, dropped drastically in 2020 when the pandemic started and haven’t caught up to accommodate the demand of a growing population.

The limited availability of homes amplifies the lock-in effect, as the need for more suitable options dissuades homeowners who might have considered selling and relocating.

This is all driving up property values and equity levels, making it a good time to access the wealth in your home.

The cost-of-living squeeze

Inflation may be cooling compared to prior years, but households still face stubbornly high expenses. For families balancing these costs alongside groceries, childcare, and healthcare, accessing home equity can be a way to relieve pressure without leaning further on high-interest credit cards.

Credit card debt is at record levels

Credit card debt has reached record highs, with interest rates often exceeding 20% APR. According to the latest Quarterly Report on Household Debt and Credit, total household debt increased by $185 billion to hit $18.39 trillion in the second quarter.

Using lower-cost home equity to consolidate and pay down debt can save thousands of dollars in interest each year. Most home equity products have a lower interest rate than credit cards.

This is one of the most practical and immediate reasons to access your home’s hidden value.

Newer options to access home equity have emerged

Homeowners can access home equity through several products, including home equity loans, home equity lines of credit (HELOCs), reverse mortgages, and cash-out refinances. These products vary in terms and qualification requirements.

Getting a mortgage today, including a refinance, can be tough if your credit isn’t excellent. Lenders are almost entirely avoiding borrowers with scores under 620, and even those below 660 struggle to qualify, according to the New York Fed Consumer Credit Panel. Most new loans are going to people with great credit — typically 760 and higher.

However, newer options like home equity investments have emerged in the last few years and are growing in popularity. Companies have recognized the growing need for homeowners to access their home equity and are making it easier for homeowners to do so.

The future is uncertain: Why 2025 is the year to act

While economists can make predictions, no one has an actual crystal ball. With high home value and equity values, high mortgage rates, tight housing supply, high living costs, and rising debt, 2025 is an ideal year for homeowners to access their home equity.

By accessing hidden value, homeowners can:

• Pay down high-interest credit card debt
• Cover rising household expenses more comfortably
• Invest in your home or other wealth-building opportunities
• Create a cushion against economic uncertainty
• Pad retirement accounts

Explore if accessing home equity is right for you in 2025.

This story was produced by Splitero and reviewed and distributed by Stacker.