Homeowners Stay on the Sidelines as Home Equity Nears Record Levels

July 23, 2025

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US homeowners are sitting on a sizable amount of home equity—more than $34 trillion according to Goldman Sachs Research. But homeowners aren’t tapping as much into home equity loans, lines of credit, or closed-end second mortgages when compared to the pre-Global Financial Crisis (GFC) era.

Instead, they’re paying down their mortgages in order to own their homes outright. In 2023, 40% of homeowners fully owned their homes, an increase from 2010, when only 33% of homeowners fully owned their homes.

Following several years of home price appreciation, homeowners’ equity in their domiciles is close to record levels

_{Source: Fed Flow of Funds, Goldman Sachs Global Investment Research}

The share of total owner-occupied units without a mortgage has climbed to 40% as of 2023 from 33% as of 2010

_{Source: US Census, Goldman Sachs Global Investment Research}

Too expensive to move

Average home prices are one reason why homeowners are staying put.

In January 2020, the median sales price of a new residential home was $329,000. That price has risen to $423,100 in January 2025, according to the US Census Bureau and the Department of Housing and Urban Development.

Retirees who may have wanted to downsize into a smaller home have to consider how the profit may impact their taxes, especially if they are on a fixed income. For younger homeowners who need more space, affordability can be a challenge, as prices climb and they face factors like student debt and a stalling job market.

Generally speaking, the more homeowners stay put, the less inventory there could be, which may drive prices higher.

Higher rates, conservative borrowing

Although there is a considerable amount of untapped home equity, the rate of home equity withdrawal remains slow. And Google searches for home equity—usually a key indicator of interest—have plateaued in recent years.

Goldman Sachs Research believes the continued slow pace of home equity extraction is likely due to higher mortgage rates, stricter underwriting, lower levels of lending, and conservative borrowing behavior.

Google searches for 'home equity' related topics have plateaued in recent years

_{Note - Numbers represent search interest relative to the highest point on the chart over time. A value of 100 is the peak popularity for the term. A value of 50 means that the term is half as popular.}

_{Source: Google Trends}

In 2021, low rates drove cash-out refinancing—homeowners replaced their debt by refinancing and pocketing the difference—but rising mortgage rates have slowed these types of transactions considerably.

Given that 85% of homeowners have loan rates locked in under 5%, higher interest rates make cash-out refinancing less attractive now. Goldman Sachs Research believes that cash-out refinancing activity can start rising once interest rates drop below 6.1%.

Inflation, tariffs, and uncertainty

Going forward, homeowners and potential homebuyers have a wide variety of issues to consider. Rising inflation, tariff impacts, job market tightening, and overall general uncertainty may inform whether a homeowner stays where they are or feels confident enough to move forward.

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