$35 Trillion in Home Equity—Why It Feels More Like a Burden Than a Blessing

The wealth locked in American homes is at an all-time high—but for many homeowners, it’s coming at a steep cost.

According to the Federal Reserve, U.S. homeowners now hold over $35 trillion in home equity, nearly double what it was in early 2020. While that sounds like a big win, many are discovering that the financial benefits of this "paper wealth" can be frustratingly out of reach.

At ReadySetLoan, we believe homeownership should empower families—not stress them out. Let’s unpack why so many Americans are house-rich, yet still feel cash-poor.

Meet Equity’s Dark Side: Taxes, Costs & Missed Opportunities

Take Nikole and Rocco in Miami Shores. They bought their home for $875,000 in 2021. With some upgrades and a booming market, their home is now worth $1.35 million. That’s over $500,000 in equity gained.

But there's a catch: Their property taxes shot up 50%, now totaling nearly $21,000 per year. As Rocco put it,

And they’re not alone. Rising home values across the country are triggering reassessments, higher tax bills, and new financial pressures for millions of families.

🐷 RSL Piggy Points: What’s Eating Into Your Equity?

• Property Taxes: Many areas have seen double-digit increases in the last few years.

• Capital Gains: More owners are bumping up against the $500,000 exemption cap—and paying up.

• Insurance & HOA Costs: Especially in high-risk areas, these costs are skyrocketing.

• Reduced Access to Credit: Even with excellent credit, homeowners are being denied HELOCs or cash-out refis due to lender restrictions.

  
  

What About Tapping Your Equity?

That’s tougher now, too. Rates are higher, and many lenders are cautious. Even with an 833 credit score, Larry McKenzie couldn’t qualify for a HELOC on his Florida condo, which he owns outright.

So while equity might be at record highs, accessing it has become a different game entirely.

The Homeownership Paradox

Owning a home was once a clear path to financial stability. But for many modern homeowners, especially those who bought during the pandemic boom, that promise feels a bit more complicated.

Home prices have soared—yet the costs of maintaining, refinancing, or even downsizing are often prohibitive. And thanks to caps on federal capital gains exemptions that haven’t kept pace with inflation, selling can mean a hefty tax bill.

Hidden Costs: College Financial Aid

Here’s another curveball: Some colleges consider home equity when calculating financial aid.

Schools using the CSS Profile—including NYU, Emory, and Colby—can factor in home equity, sometimes reducing aid eligibility by thousands. This can feel especially unfair to families who are “house rich” but cash tight.

RSL Perspective

At ReadySetLoan, we’re seeing a shift in how Americans think about homeownership and financial freedom. Home equity should be a tool—not a trap. But to leverage it wisely, you need a strategy.

We’re here to help you navigate:

• Smart ways to access your equity without sacrificing your financial flexibility.

• Loan programs that work with today’s high-rate environment.

• Tax and lending implications of tapping equity in different life stages.

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🏁 Ready to Turn Home Equity into Opportunity?

Don’t let the weight of wealth hold you back. Whether you're thinking about tapping equity, downsizing, or just exploring your options, ReadySetLoan is your go-to guide at the mortgage finish line.

Let’s figure out the smartest next step—together.

🏁 Learn more at ReadySetLoan.com