Cash-out refinance applications have reached their highest volume since 2023 as American homeowners sit on a collective $32 trillion in home equity and declining mortgage rates make equity extraction increasingly attractive.
By the Numbers
Homeowners who purchased or refinanced before 2022 with rates below 4% are finding creative ways to access equity without surrendering their favorable first mortgage terms.
- Average cash-out amount: $87,000 in Q1 2026
- Home equity lines of credit (HELOCs) as alternative: up 55% year-over-year
- Most common uses: home renovation (38%), debt consolidation (27%), investment (19%)
- Closed-end second mortgages gaining popularity as rate-preservation strategy
Risk Considerations
Financial advisors caution against using home equity for depreciating assets or speculative investments. With home price appreciation expected to moderate to 2-3% annually, overleveraging could put homeowners at risk if property values decline in overheated markets.
