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  • 44 million Americans have $6 trillion in equity they can tap at affordable rates for home improvement projects, or to pay off high-interest debt
  • U.S. home values are up 46% since 2012, bringing average “tappable equity” per home to $158,180 in the top 50 markets
  • Cashing out home equity without comparing actual mortgage interest rates could cost homeowners thousands in unnecessary interest charges

Rising home values mean 44 million Americans can tap $6 trillion in equity to finance home improvement projects at affordable interest rates, or pay off high-interest debt like credit cards or student loans.

About 80% of that equity — $4.9 trillion — is concentrated in the 50 metro areas below. Thanks to rising home prices, the average homeowner in these markets has $158,180 in “tappable equity.” That’s the amount of cash they can access while still retaining an ownership stake of at least 20% in their homes.

Although interest rates are once again on the rise, mortgage rates remain low by historical standards, and a growing number of homeowners are tapping their equity through cash-out mortgage refinancing.

But research by Freddie Mac shows most borrowers take out a mortgage without getting actual rates from multiple lenders, putting them at risk of paying lenders thousands of dollars in unnecessary interest charges.

Even a quarter point interest rate reduction on a typical $200,000 30-year mortgage refinance can save a U.S. homeowner more than $10,000 over the life of the loan.

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Coastal cities dominate top 10

All but two of the top 10 U.S. markets for tappable equity are on the coasts, where homes tend to be pricier. Homeowners in the San Jose metro area, for example, can cash out an average of $696,000 in equity while still retaining a 20% ownership stake in their homes.

But thanks to the sheer number of homes with tappable equity, Chicago and Dallas also make the top 10. The typical metro Chicago area homeowner may only be able to access $74,000 in a cash-out refinance, but there are 2.19 million homes with tappable equity.

Data aggregator Black Knight estimates that across the U.S., more than 44 million homeowners now have some tappable equity. Total tappable equity for the U.S. as a whole surpassed $6 trillion in June, a nearly three-fold increase from 2012.

Rising home prices driving equity increases

U.S. home values hit a low for the downturn of $148,600 in February, 2012. At that point, millions of homeowners were “underwater” — they owed more on their mortgages than their homes were worth.

Since then, Zillow estimates the median home value has climbed by 46%, to $216,700. That’s an average equity gain of $68,100 per home.

Low unemployment can create demand for housing, particularly in markets where jobs are plentiful and homes are scarce. During the last housing boom, U.S. home values peaked in 2007 when unemployment was below 5%.

Then the housing bust sparked layoffs in construction and financial services that spread to other sectors, and home values took a dive.

During the 2007-2009 recession, the U.S. unemployment rate peaked at 10% in December, 2009. Although it took more than two more years for home values to rebound, for the last six years the U.S. has enjoyed employment growth and rising home prices.

Tapping equity responsibly

It’s important to note that falling unemployment and rising home prices doesn’t mean homeowners don’t have to worry about ups and downs in the economy. Pulling too much cash out of a home can put homeowners at higher risk of foreclosure in a downturn.

But homeowners who keep at least a 20 % stake in their homes when refinancing have enough of an “equity cushion” that lenders typically won’t require them to obtain private mortgage insurance.

Fannie Mae economists forecast that Americans will refinance $401 billion in mortgage debt in 2019. There are four main reasons homeowners refinance their mortgage:

  • To cash out equity they’ve built in their homes to finance home improvements, debt consolidation or other major expenses
  • To save money by lowering their interest rate
  • To convert an adjustable-rate mortgage (ARM) loan into a fixed-rate loan
  • To rid themselves of FHA mortgage insurance premiums once their loan-to-value (LTV) ratio drops below 80%

Undertaken responsibly, a cash-out refinancing can provide homeowners with an affordable source of funding for home improvement projects or other big-ticket expenses like college or unexpected medical bills. Many homeowners are also tapping equity in their home to get rid of high-interest credit card or student loan debt.


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Last year, U.S. homeowners accessed $92.1 billion in home equity through cash-out mortgage refinancing ($69.6 billion) or refinancing to pay down a second mortgage or home equity line of credit ($22.5 billion). That’s more than double the $42.5 billion in equity tapped by homeowners refinancing in 2014.

How to compare mortgage rates

For homeowners who are thinking about cashing out some of their equity by refinancing, it pays to compare mortgage rates.

Until recently, it’s been quite a chore to do that online. Today, there are three main avenues for exploring mortgage rates online:

  • Single-lender websites
  • Traditional rate comparison sites
  • Modern mortgage marketplace

Some single-lender websites that facilitate “quickie mortgages” have reduced the hassle of applying for a loan. But they don’t provide information on rates available from other lenders, and may even discourage consumers from shopping for a mortgage.

The main goal of many traditional rate comparison sites is to convert consumers into “leads” and sell them to lenders. Since the rates they generate are often based on self-reported credit scores and little or no underwriting is performed, they can be misleading. is a modern mortgage marketplace that’s integrated with credit bureaus and lenders, so consumers can request actual rates from top mortgage lenders. Using Credible, consumers can:

  • Compare actual rates in 3 minutes (not ranges or estimates)
  • Shop and close “on platform,” like booking an airline ticket or buying essentials on Amazon
  • Save time and avoid frustration with streamlined, digital origination process
  • Consult with Credible’s licensed loan officers if needed

Compare Refi Rates Now

While strong home equity growth presents an opportunity for many homeowners to meet financial goals like paying down costlier debt or improving their homes, they should make sure they’re not overpaying when they refinance their mortgages.

For detailed reports on the following metro markets, click on the links for each market below:

About the author
Matt Carter
Matt Carter

Matt Carter is a Credible expert on student loans. Analysis pieces he’s contributed to have been featured by CNBC, CNN Money, USA Today, The New York Times, The Wall Street Journal and The Washington Post.

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