In Q1 2025, U.S. homeowners tapped into approximately $25 billion in home equity through second-lien mortgages, marking a significant 22% increase from the same period last year. Despite being typically slow for home equity lending, lower interest rates in early 2025, especially for HELOCs, stimulated market activity. With the Federal Reserve potentially cutting rates, borrowing costs for homeowners could decrease further. Record home equity levels reached $17.6 trillion, offering substantial tappable equity. Around 48 million mortgage holders have an average of $212,000 in tappable equity, indicating a strong refinancing opportunity.
That marks a 22% increase compared to the same quarter last year, and the first quarter is typically the slowest for home equity lending.
Equity levels remain historically high, and now we're seeing the cost of borrowing against the equity drop meaningfully.
In total, U.S. mortgage holders carried a record $17.6 trillion in home equity entering the second quarter, up 4% from a year earlier.
It's periods like these where both demand and affordability trends converge that represent a critical opportunity for housing finance professionals.
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