Borrowers Total $17 Trillion in Home Equity in Q4 2025

Building equity is one of homeownership’s major financial advantages over renting.

Home equity is how many people accumulate wealth and, when tapped into, can provide borrowers with money for renovating and remodeling, investing, emergencies, or even paying off other debt.

Homeowners with mortgages saw a collective equity of $17 trillion in 2025’s fourth quarter, according to Cotality. While that actually decreased by $8,500 annually, the average borrower has $295,000 in equity. See which states enjoyed the largest and smallest bumps to their home equity in Q4 2025.

What experts are saying

Thomas Brock, financial consultant at Acclarity

“A HELOC is secured by your home, and borrowing more than you can afford to repay puts this asset at risk. When used conservatively, a HELOC can be a great funding channel for short-term liquidity needs, home improvements and/or strategic debt consolidation.”

The latest home equity gains

Home equity grows or shrinks in conjunction with housing prices.

In 2025’s fourth quarter, U.S. borrowers combined to lose $78.8 billion — a decrease of 0.5% — annually in home equity. The average mortgaged homeowner lost about $8,500 in equity year-over-year but still sits on about $295,000.

“As home price growth has slowed, homeowner equity has largely leveled off, but it remains historically high,” said Selma Hepp, chief economist at Cotality. “while borrowers have been relatively timid in tapping the equity, declining rates could make tapping home equity relatively more affordable in the future.”

Home equity changes by state

The fourth quarter’s home equity gains varied around the country. Borrowers in some states saw towering growth over the national average, while others had modest increases and even declines.

The Northeast led the way in equity gains, with annual increases of about $26,100 in New Jersey, and $23,100 in Wyoming, and $20,300 in Connecticut.

At the other end of the spectrum, borrowers in Florida saw the largest equity decrease with a $29,400 drop year-over-year. That was followed by losses of around $24,700 in California, and $23,900 in Arizona.

The map below shows the fourth quarter’s estimated annualized home equity changes by state, per Cotality:

How can you use home equity?

Since home equity is tied up in your property, it must be converted to liquid cash in order to be used. There are three main ways to do this: a home equity loan (HEL), a home equity line of credit (HELOC), or a cash-out refinance.

With a home equity loan, you keep your existing mortgage and take out a second loan against your property. These typically have lower closing costs but may come with slightly higher interest rates compared to cash-out refis. Here is a list of everything you need for taking out a home equity loan this year.

HELOCs work similarly to credit cards, with borrowing limits that can be repaid and reused. They usually come with variable rates and low or no closing costs, and you pay interest only on the outstanding loan balance. HELOCs also have set “draw periods” after which you have to repay the remaining balance in full. Here is a full list of HELOC requirements.

With a cash-out refi, you replace your existing home loan with a new primary mortgage. The new loan’s balance will be larger than what you owed, but that difference gets returned to you as cash. Refinance closing costs average around 2-5% of the loan amount and usually get taken out of your cash back total. See if you qualify for a cash-out refi.

Once you’ve cashed out your equity, it can be used for just about anything you want. Many homeowners tap equity to complete home improvements or repairs, consolidate high-interest debt into one cheaper loan payment, or make a down payment on a vacation home or rental property.

How do I calculate my home equity?

Home equity is the amount of cash value built up in your property. As you pay down your mortgage and housing values increase, your equity grows.

To figure out your total equity, take your home’s current value and subtract your mortgage balance. If your house is worth $500,000 with a loan balance of $300,000, then you have $200,000 in equity.

Getting an estimated property value requires using an online evaluator, researching recent comparable home sales in your area, or paying for an appraisal. Your lender can assist you in this process and figure out the best way to take advantage of your equity.

How much equity can I take out of my property?

Typically, borrowers can’t cash out all the equity they built up. With exception, lenders normally prefer to keep 20% of your home’s value untouched as default protection. The remaining amount is referred to as “tappable” equity.

Based on the example in the section above, your 20% buffer comes out to $100,000 ($500,000 x 0.2). After subtracting that from your total equity, you end up with $100,000 in tappable equity ($200,000 - $100,000).

Your next steps

If you have a running list of uses for your home’s equity, you can start tapping into it.

The best way to figure out how much you can borrow and which loan type to use is to talk with your lender. They can guide you through property valuations, the best ways to tap your equity and which you qualify for.

Leveraging your equity is one of the biggest benefits of owning a home and a way to make your money work for you.