You’ve probably heard that homeowners today are sitting on record levels of equity.
But what does that actually mean for you?
Home equity isn’t just a number on paper. It’s the portion of your home you truly own. And in today’s market, it may be one of your most valuable financial tools.
How Much Equity Do Homeowners Have Today?
Here’s how it works. As you pay down your loan and home prices rise through the years, the share of your home that you own free and clear grows. That’s your equity.
And according to data from the Census and ATTOM, two-thirds of homeowners have a substantial amount of it today. 39% own their home outright without owing anything on it. And another 27% have at least 50% equity in their homes (see chart below):
That’s substantial.
And in real dollars, Cotality says the typical homeowner has nearly $300,000 in equity. That’s real wealth tied to real property.
Whether your equity is above that mark or below it, here are four ways it can work for you.
Ways You Could Use Your Home Equity
1. Move Into a Home That Better Fits Your Life
Life changes.
Maybe you need more space.
Maybe you need less.
Maybe you want to relocate within Maui or simplify your lifestyle.
Maybe you need less.
Maybe you want to relocate within Maui or simplify your lifestyle.
Your equity can become the down payment on your next home. In some cases, it may even be enough to purchase your next property outright.
For homeowners who’ve been waiting for the right moment to make a move, this built-up equity can open doors that weren’t available years ago.
2. Upgrade Your Current Home
Not ready to move?
You can reinvest your equity back into your current property.
Strategic upgrades such as kitchen improvements, updated bathrooms, or energy-efficient enhancements can increase both enjoyment and future resale value.
Before starting renovations, it’s smart to talk with a local real estate professional. Not all upgrades return the same value, especially in a market as unique as Maui. Prioritizing the right projects makes a difference.
3. Fund a Major Life Goal
Equity can also support bigger life plans.
Some homeowners use it to:
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Launch a business
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Strengthen retirement savings
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Cover education expenses
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Help family members with a down payment
Real estate has long been a wealth-building vehicle. For many, tapping into equity becomes a way to put that wealth to work beyond the property itself.
4. Protect Yourself During Financial Hardship
Equity can also act as a safety net.
If financial challenges arise, having substantial equity gives you options. Many homeowners are able to sell and walk away with funds instead of facing foreclosure. If this is a concern, it’s important to speak with a local real estate expert early. Understanding your equity position helps you make informed decisions before options narrow.
What To Do Next
If you’re considering using your equity, start with two steps:
Step 1: Get a professional equity assessment.
A local agent can help determine your home’s current value and calculate how much equity you truly have.
A local agent can help determine your home’s current value and calculate how much equity you truly have.
Step 2: Speak with a financial advisor.
Before accessing equity, it’s important to review how it affects your long-term financial position.
Before accessing equity, it’s important to review how it affects your long-term financial position.
As a general guideline, many experts recommend maintaining at least 20% equity in your home as a financial cushion. That was a lesson many homeowners learned the hard way in 2008.
According to the Intercontinental Exchange, most of today’s equity meets that guideline:
“As of Q4, mortgage holders have $17.3T in home equity, including $11.2T in tappable equity ‒ accessible via cash-out refinances or home equity lines while maintaining 20% equity in the property . . . ”
That means a significant portion of today’s equity can be accessed while still preserving a healthy loan-to-value ratio.
Bottom Line
Your home equity may be one of your largest financial assets.
Whether you’re thinking about moving, remodeling, investing, or preparing for the future, it’s worth understanding exactly what you have and how it can support your goals.
If you’d like a clear picture of your property’s current value here on Maui, let’s talk.
What would you do right now if you had access to that equity?
The information and opinions in this article are not investment advice. Tim Stice makes no guarantees about accuracy or completeness. Always do your own research and consult a professional before making financial decisions. Tim Stice is not liable for any loss or damage resulting from reliance on this content.
Tim Stice, Broker Realtor | Hawaii Life | Maui, Hawaii | Real Estate Agent
