Amid persistent inflation, high interest rates, and growing anxiety about a potential recession, nearly 30% of U.S. homeowners are considering tapping into their home equity in the next 12 months, according to a new national survey from MeridianLink, Inc.
The survey of approximately 1,500 homeowners found that 28% are likely to take out a home equity loan or line of credit (HELOC)—a notable increase from 21% in 2022. The seven-point jump suggests that more Americans are looking to access the cash tied up in their homes as a buffer against rising costs and economic instability.
These findings come as the U.S. economy sends mixed signals. While the labor market remains strong, inflation continues to erode purchasing power. Mortgage rates, although slightly lower than their 2023 peaks, still hover near 7% for a 30-year fixed loan. The Federal Reserve has paused its aggressive rate-hiking cycle, but concerns linger about when and how quickly rates might fall, especially as the Fed keeps the door open for future hikes if inflation persists. Meanwhile, renewed trade tensions and tariff threats are adding pressure to already stretched household budgets.
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Home equity as a safety net
For many homeowners, the equity in their property is one of their largest financial assets—and increasingly, a tool for weathering uncertainty. The MeridianLink survey highlights growing interest in equity-based borrowing, with motivations ranging from home improvements (45%) to debt consolidation (16%) and investment in other properties (16%).
“This shift signals that homeowners see their equity not just as locked-in value, but as a flexible resource,” said JP Kelly, SVP of Mortgage at MeridianLink. “Still, financial institutions have work to do in helping consumers understand their options and feel confident about repayment.”
Knowledge gaps and lingering hesitations
Despite growing interest, 54% of homeowners surveyed remain hesitant to tap their equity. Among them, 63% cited high interest rates as a deterrent. Others expressed concerns about risking homeownership (22%) or unclear repayment terms (18%).
While more than half of respondents (53%) said they have a strong understanding of home equity products—up from 43% in 2022—nearly a quarter (23%) still feel unsure, pointing to the continued need for education.
According to the survey, borrowers value not just affordability, but also a smooth and trustworthy lending experience. Reputation and transparency ranked just behind interest rates in importance, with 43% saying a lender’s trustworthiness is a key factor in their decision.
Speed, personalization, and digital tools also stood out: 41% of homeowners said they want a seamless, tailored process when applying for a home equity loan or HELOC.
Choosing the right path to cash
When it comes to accessing the equity in your home, there are several options available. Each has its own set of benefits and potential risks, and the best choice depends on your personal financial situation, goals, and the current economic environment.
Here’s a breakdown of your options:
- Home equity loans offer lump sums at fixed interest rates.
- HELOCs provide revolving credit with variable rates—more flexibility, but more risk if rates rise.
- Cash-out refinancing replaces your current mortgage with a larger one, but may not be ideal if your original rate is low.
- Alternative solutions like shared equity agreements or bridge loans may appeal to certain borrowers, depending on their needs and risk tolerance.
The bottom line
With recession worries in the air and budgets under pressure, more Americans are exploring ways to make their homes work for them financially. Tapping into equity isn’t just for emergencies—it can be a strategic way to unlock capital without sacrificing a low mortgage rate.
But before making a move, experts stress the importance of speaking with a trusted lender. The right option depends on individual goals, financial health, and comfort with repayment.
As the economic outlook remains uncertain, one thing is clear: homeowners are increasingly viewing their equity as a lifeline—and lenders have a growing role to play in making that access easier and more transparent.
Written by: Aleksandra Kadzielawski