Home equity investments may unlock $35 trillion in US wealth

There’s a lot of wealth trapped inside American homes. But for millions of US homeowners, turning it into cash is surprisingly hard.

Home equity investments (HEIs) could help bridge that gap. By allowing homeowners to tap their equity without taking on another monthly payment, HEIs offer a new source of liquidity for consumers — and a potentially significant growth opportunity for originators and investors. The scale is enormous. Federal Reserve data shows homeowners across the US are sitting on a staggering $35 trillion in home equity, up from about $13 trillion just a decade ago. But beneath this historic wealth sits a growing cash-flow crunch.

The pressure comes down to household economics. According to an Oliver Wyman analysis of US Bureau of Labor Statistics data, prices for essentials have outpaced wage growth. Per the Bureau of Economic Analysis and the Federal Reserve Bank of New York, the personal saving rate has also fallen to roughly 3% of disposable income. And household debt has reached a record $18.8 trillion.

Traditional home-equity products don't always provide an easy answer. Home equity loans (HELs), home equity lines of credit (HELOCs), and cash-out refinances can carry significant monthly payments or unattractive tradeoffs in the current rate environment. Federal Housing Finance Agency data shows roughly 78% of outstanding US mortgages carry a rate below 6%, and about half are below 4%, making it costly for many homeowners to refinance to access cash.

For others, underwriting requirements remain a barrier. According to the Federal Financial Institutions Examination Council and the Home Mortgage Disclosure Act data, more than a third of HELOC applicants fail to qualify. Independent workers with irregular income, retirees, and consumers with lower credit scores can also face lending roadblocks.

These dynamics point to an underserved segment: homeowners with meaningful equity and a need for liquidity, but with limited ways to access it without additional monthly cash-flow burdens. For HEI originators, reaching that segment represents a potentially significant growth avenue.

HEIs offer a new way to access home equity without monthly debt

A home equity investment can turn part of a homeowner’s equity into cash without adding another monthly payment. An HEI provider gives the homeowner a lump sum upfront in exchange for a share of the home’s future value. The total cost is generally lower than that of most unsecured credit, though typically higher than that of home-secured credit.

The idea has been around for two decades. What’s changed is the market around it.

HEI underwriting focuses primarily on the home rather than the regularity of a homeowner’s income. Providers have built protections around that access, including scenario-based cost disclosures, independent counseling for older and lower-credit homeowners, three-day cancellation rights, and no prepayment penalties.

Ultimately, for those with substantial home equity but limited cash, HEIs can open a door that traditional lending leaves closed.

But unlocking the market will require originators to overcome a significant awareness gap. More than 70% of homeowners in a July 2026 Oliver Wyman survey of 540 US homeowners were unfamiliar with HEIs, and only about 8% could name a provider.
The same research also suggests that familiarity could translate into demand. Among homeowners considering tapping their equity, 16% say they would seriously consider an HEI, already making it the third-most-considered product behind HELOCs and HELs despite far lower awareness.

For originators, this shows education may be as important as product availability. Case in point: 61% of respondents said a clear, simple explanation of contract terms from the originator would make them more comfortable with an HEI. Closing the familiarity gap will require making a relatively unfamiliar and complex product easier for consumers to understand and trust.

Strong investor appetite could accelerate the next phase of HEI growth

Consumer demand is only one side of the HEI growth equation. For institutional investors, HEIs offer exposure to US home price appreciation without the operational burden of owning single-family homes directly. Rated securitizations began emerging in 2023, allowing HEI contracts to be bundled into securities and sold to institutional investors. That brought more liquidity and credibility to the category just as private credit was looking for new sources of yield.

Demand has followed. One capital provider we interviewed said investor demand for a recent HEI issuance was seven times greater than the available supply — suggesting capital isn’t the bottleneck.

The result is an unusual market structure: homeowners looking for liquidity on one side, institutional capital seeking property-backed returns on the other, and HEI originators connecting the two.

But the HEI market is still in its early innings. The three largest providers originated fewer than 30,000 contracts in 2025, compared with an annual average of 1.32 million HELOC originations over the past decade. For originators, the opportunity is turning strong investor appetite into a product that can reach far more homeowners.

The next phase of HEI growth will depend on consumer confidence

Scaling HEIs will require more than investor appetite and consumer demand. Regulation is still developing state by state, with Illinois providing the most complete framework to date. The contracts themselves can also be difficult for consumers to understand, particularly regarding what they could ultimately owe. Clearer rules, greater transparency, and better consumer education will be critical to building trust as the market grows.

The economy could also shift the equation. Lower mortgage rates could make cash-out refinancing more competitive, while falling home prices could mean less equity to tap and lower returns for investors.

But even if rates fall, refinancing and HELOCs won't be available to everyone.

That’s what makes HEI worth watching. While the market is still small, the pieces of a larger asset class are beginning to fall into place. The infrastructure is taking shape, and institutional capital is showing up. What comes next will determine whether HEIs remain a niche alternative at the margins or a meaningful part of how Americans access their home equity.