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The housing shortage has pushed home values up nearly twice as fast as they've averaged over the past five years. It's also caused a boom in home equity, with homeowners in over half the country seeing their equity increase by more than 100% since 2020, according to a Bankrate analysis. West Virginia saw the most dramatic uptick: A 450% increase in home equity over the last five years, from an average of $6,529 in 2020 to $35,831 in 2025. "The substantial gains reflect, in part, the fact that West Virginia has the lowest home prices nationwide," Bankrate said in its report. Average home equity in Oklahoma also more than quadrupled, soaring from $8,766 in 2020 to $46,562 in 2025, a 431% boost. Rounding out the top five were Connecticut (+297%), Kansas (+234%) and Illinois (+217%). Click here to see how much home equity has changed in your state Only two areas saw home equity declines: Washington, D.C. (-38%) and Louisiana (-22%). Modest gains in Alaska (+17%), North Dakota (+19%) and Colorado (+48%) landed them in the bottom five, as well. The overall robust environment has allowed homeowners to tap more of their homes' value for cash. In the first quarter of 2025, Americans withdrew nearly $25 billion in home equity products (primarily ), the largest first-quarter volume since 2008. How to tap home equity If you are one of the many homeowners enjoying increased equity, you can access it in several ways. HELOC: With a credit score of 650 to 680 and a debt-to-income ratio of 43% or less, you can open a home equity line of credit, typically for up to 80% of your home's value. The draw period is usually up to 10 years and you have 20 years to repay the loan. : The requirements are similar to those for a HELOC, but instead of a line of credit, the lender provides a lump sum. You can usually borrow up to 80% of your home's value (based on the loan and your primary mortgage combined) and you have 20 years to pay it off. : With an HEI agreement, you sign over a portion of your home's current and future value for cash. Since your credit score isn't considered, HEIs are popular with homeowners with bad credit. You can leverage equity to access cash through home equity sharing or a home equity loan. Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability. Terms available 15 to 30 years Credit needed 500 Minimum equity required 25% Terms available 10, 15 or 20 years Credit needed 680 Minimum equity required 20% Home equity growth by state See how much home equity has grown in your state since 2020. How to increase your home equity If you haven't enjoyed the recent boost, there are still ways to build more equity in your home. Make bigger payments: You can add equity by paying more than your required mortgage payment every month or by making a one-time additional payment. A single extra payment a year will save you thousands of dollars in interest and enable you to accrue equity faster. Let your lender know you're allocating the funds toward the principal, and not the interest. Renovate or remodel: Relatively modest updates to your home can seriously boost its value. A new steel front door costs approximately $2,355, according to the Journal of Light Construction, but it should add $4,430 to your house's resale value, an increase of 188%. Remodeling involves more significant changes, like finishing a basement or adding another bathroom. According to Angi, the return on investment on a kitchen remodel can top 100%. Refinance: If you can refinance to a lower rate, you'll shrink your monthly payments and free up more money for renovations or additional principal payments, which would increase your home equity. To make sure you're coming out ahead, factor in closing costs and other refinance expenses. Subscribe to the CNBC Select Newsletter! Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here. Why trust CNBC Select? At CNBC Select, our mission is to deliver high-quality service journalism and comprehensive consumer advice to our readers, enabling them to make informed financial decisions. Every mortgage article is based on rigorous reporting by our team of expert writers and editors. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content independently of our commercial team and any third parties, and we pride ourselves on maintaining high journalistic standards. Catch up on CNBC Select's in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.
