Maximizing Dormant Wealth
On one side of the housing market, eager buyers are facing unprecedented challenges. According to Barron’s, the median home price has surged to $422,600—nearly double its value from just five years ago.
A key driver of these elevated prices is the severe lack of inventory. Homeowners are holding onto their properties at record rates, creating a supply shortage that continues to fuel an increasingly expensive buyer’s market.
This imbalance has led to an unprecedented accumulation of home equity across the U.S., with trillions of dollars in untapped wealth, even as the cost of essential expenses—such as home health care—continues to escalate. Just last year, homeowners were sitting on more than $31 trillion in home equity.
To put this into perspective, this figure far exceeds the historical norm of $8-$12 trillion, which remained relatively stable throughout the 2000s.
The Home Equity Boom
According to USA Today, the increasing amount of home equity is attributable to rising home values and those with mortgages rates below 4% who are wary to sell. As a result, homeowners are sitting on a great deal of dormant cash.
Millions of homeowners are sitting on significant, often unrealized wealth in home equity—an asset that could be strategically leveraged to enhance their financial security.
“Homeownership is the primary means of wealth creation in the United States,” Mark Hamrick, senior economic analyst at Bankrate, told USA Today.
What Can Homeowners Do
With homeowners sitting on significant dormant home equity, many are seeking ways to access it. However, according to our experts at Cornerstone Financing, some existing methods are not feasible.
The USA Today article suggests a home equity loan to access home equity which delivers a lump sum at a fixed rate with monthly payments. While home equity has been accessed, a home equity loan is just more debt with additional monthly costs.
Cornerstone Financing has found tax-free ways to access home equity for cash, allowing homeowners to purchase annuities, life insurance, long-term care and other financial planning options. Its product, CHEIFS (Cornerstone Home Equity Insurance/Investment Funding Solutions) breaks new ground by converting homeowners’ largest asset, home equity, without the drawbacks of an equity loan. Unlike a home equity loan or a second mortgage, it keeps homeowners from accumulating debt while preserving their assets and retaining all the value of homeownership.
The record levels of home equity that homeowners currently possess present an immense opportunity to tap into dormant home equity amid a turbulent economic climate.
