Significant growth in available home equity in Southern and Midwestern states
Triple-digit growth in average equity across many states may help homeowners make home improvements, decrease debt or pay for school
KEY POINTS
- Homeowners in the South and Midwest have seen triple-digit equity growth, prompting interest in tapping into home equity.
- HELOCs offer flexible access to funds over time, while cash-out refinances provide a lump sum for specific expenses.
- Choosing the right option depends on timing, purpose and working with a lender who understands your goals.
Homeowners across the United States have more than $11.5 trillion in tappable equity—the highest in five years, according to recent Bankrate analysis.
Nationwide, available home equity has increased 142% since 2020 to an average of $112,430 in 2025. Homeowners in the South and Midwest have seen the greatest home equity growth. For example, the five-year average change in average home equity in Oklahoma has grown by 431% and Kansas has seen an increase of 234%. Many homeowners are wondering if it’s worth tapping into that asset.
“With homeowners now holding more equity, it’s worth evaluating borrowing options to make informed financial choices,” said Tanya Bates, regional manager for BOK Financial Mortgage®. “Tapping into that equity can be very useful for things like home projects, paying off debt or large expenses.”
A home equity line of credit (HELOC) allows the borrower to take out a specific amount of money when needed, based on available equity. The borrower pays interest only on the funds advanced.
A cash-out refinance, on the other hand, allows mortgage holders to refinance their loan based on the equity available and potentially add additional money to the new mortgage loan. The homeowners receive this money in a lump sum of cash to use as they see fit.
Both options can provide the resources homeowners need to meet other financial goals, such as:
- Making home improvements
- Consolidating debt into lower interest rates
- Paying for higher education or other large expenses
- A combination of the above or more
Making the right decision
While there are several factors that can affect a borrower’s decision about which financing option to choose, one way to decide can be based on how you want to use the extra money.
“Taking the time to understand your options and working with an experienced lending advisor who offers personalized guidance can be key when navigating major financial decisions with lasting impact,” Bates said.
For example, if you are contemplating an expense of a specific amount and with more certain timing, such as putting in a swimming pool for $50,000, it might make more sense to do a cash-out refinance.
However, if you’re not sure about the timing and/or use of your available equity—such as deciding between putting in a pool, remodeling your kitchen or paying down debt—the flexibility of a HELOC may be better for your situation, Bates suggested. “There’s no universal solution. We suggest consulting with a lender who takes the time to understand your goals, asks thoughtful questions and uses that insight to help identify the most suitable financing option for your situation.”
- Here’s a closer look at the two options