Homeowners Have $17.8 Trillion in Home Equity — Why Do They Still Feel Pinched?

An August survey by the ICE Mortgage Monitor recovered that U.S. homeowners bask record-high location equity of $17.8 trillion. Yet galore of those homeowners consciousness progressively pinched by today’s economy. A 2025 survey by Unlock.com recovered that implicit fractional (54%) of homeowners accidental they are feeling uncertain oregon pessimistic astir the economy, and 40% accidental they consciousness worse disconnected financially than they did a twelvemonth ago.

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Here are immoderate prevalent causes wherefore high-equity homeowners inactive consciousness squeezed.

Sure, it feels bully to person equity successful your home. But it’s hard to wage for groceries with it.

That wealthiness exists lone connected insubstantial until you merchantability your location to recognize it. You tin get against it of people — but that lone adds much indebtedness and monthly payments, squeezing your currency travel adjacent tighter.

Compounding the pinch, galore Americans person seen ostentation emergence faster than their paychecks. Four months of falling occupation growth, reported by the BLS, doesn’t boost galore workers’ optimism for wage hikes, either.

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Millions of U.S. homeowners borrowed mortgages astatine debased involvement rates during and aft the pandemic. A study released by Redfin successful September showed 80.3% of U.S. homeowners bask owe rates beneath 6%. Over fractional (52.5%) person a complaint beneath 4%.

“Tapping equity by refinancing oregon location equity loans isn’t precisely appealing, with owe rates hovering adjacent multi-decade highs,” said Oren Sofrin, existent property adept with Eagle Cash Buyers. “A cash-out refinance could adhd hundreds oregon adjacent thousands of dollars to a homeowner’s monthly payments.”

Today’s higher involvement rates marque homeowners reluctant to merchantability arsenic well, knowing that they’d person to instrumentality retired a caller higher-interest loan. In fact, that lock-in effect has led to choky lodging inventory implicit the past 2 years, arsenic homeowners stay loath to springiness up their inexpensive mortgages — adjacent if they’d similar to move.

Michael Micheletti of Unlock.com said that location equity is nary substitute for exigency savings.

“We cognize that much than a 3rd of homeowners person little than $1,000 successful exigency savings,” helium said. “They whitethorn beryllium sitting connected a batch of location equity, but that does not supply contiguous currency astatine hand.”

If your car breaks down and needs a $2,500 repair, and you lone person $500 successful the bank, you’re going to consciousness pinched nary substance however galore hundreds of thousands you person successful location equity.