Home Equity Is Surging. Borrowing Just Got Cheaper. Should You Tap In Now or Wait?

Right now, American homeowners are sitting on a record $11.5 trillion in tappable equity.

That’s equity you could access without selling your home, while keeping at least a 20% cushion in place.

And, with interest rates on home equity lines of credit (HELOCs) falling, this may be the most affordable time in years to tap into your home’s value.

If you own property in Montgomery Alabama, this trend is especially relevant. The local market for Montgomery Alabama real estate is robust, and homeowners may have more opportunities than ever to leverage their growing equity.

But does it make sense to borrow now, or should you wait?

Let’s break down the numbers, what this trend means for homeowners, and how to know if leveraging your equity is the right move for you.

Record-Breaking Equity

According to the June 2025 Mortgage Monitor by ICE Mortgage Technology:

• U.S. homeowners hold $17.6 trillion in total home equity

• $11.5 trillion of that is considered “tappable"—available for borrowing while maintaining 20% equity

• The average homeowner has about $212,000 in tappable equity

• 48 million mortgage holders now have access to this equity, an all-time high

Despite all that equity, most homeowners haven’t touched it.

In Q1 of 2025, borrowers withdrew just 0.41% of their available tappable equity, well below historical averages.

Borrowing Just Got Cheaper (By Over $100/Month)

In addition to rising equity, the cost to borrow against that equity is dropping.

HELOC rates have fallen by 2.5 percentage points in recent months, dipping below 7.5% in March.

Here’s how it breaks down in terms of monthly payments:

• In early 2024, the average monthly payment to borrow $50,000 via a HELOC was $412

• As of Q2 2025, that payment dropped to $311

That’s a monthly savings of over $100.

And if the Fed proceeds with the expected rate cuts later this year, we could see HELOC rates dip into the mid-6% range by 2026, bringing monthly payments even lower.

Why More Homeowners Are Considering HELOCs

With equity levels high and rates easing, more homeowners are realizing they can put their home’s value to work, without giving up their low mortgage rate.

In fact, ICE’s recent Borrower Insights Survey found that 1 in 4 homeowners are considering a home equity loan or HELOC in the next year.

Here’s why:

• Fund a renovation: Whether it’s a new kitchen, bathroom upgrade, or backyard oasis, equity can finance improvements that enhance your home’s value and your daily life.

• Consolidate high-interest debt: Pay off credit cards or personal loans by folding them into a lower-interest HELOC, saving money and simplifying your payments.

• Make a strategic investment: Your equity can help fund a business, a second property, or a child’s education without touching your retirement savings.

• Pay for emergencies: A HELOC gives you a flexible line of credit you can draw from as needed, providing peace of mind for life’s unexpected expenses.

These are just some of the many homeowner financial options available in today's market.

Should You Tap Into Your Equity Now or Wait?

It depends on your goals. Ask yourself:

• Do I have a clear plan for the funds (remodeling, consolidating debt, investing)?

• Can I comfortably afford the monthly payment, even if rates fluctuate?

• Do I want to access cash without selling my home or refinancing my low-rate mortgage?

If the answer to those questions is “yes,” then tapping into your equity could be a smart move.

If you're comparing HELOC vs refinance or simply looking into refinance alternatives, it's essential to understand all your choices.

And if you're a homeowner exploring options for home improvement financing or borrowing against home equity, working with a knowledgeable professional can make all the difference.

For those in the River Region, Britt Dowling Montgomery Alabama REALTOR is a trusted local expert who can help you assess your home's value, explore loan options, and connect with reputable lenders.

Curious about your home's current value or want to explore a HELOC or home equity loan? Reach out today to take the next step with confidence.