Rising Housing Costs Put Homeowners in a Bind 

Home equity in the U.S. has risen nearly 80 percent since 2020 – up from $19.5 trillion to $35 trillion, according to data from the Federal Reserve. American homeowners are increasingly experiencing the lock-in effect as costs associated with selling and purchasing a new home under current market conditions rise. While rising equity, coupled with the lock-in effect, could promote homeowners’ interest in home equity lending products, in Q4 2024, consumers tapped only 0.41 percent of their available equity, according to data from ICE. As equity in the U.S. housing market rose, so did interest rates and lending standards associated with these home equity products, making them less affordable for borrowers.

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