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Home equity levels are rising: 3 reasons to tap in now
Over the last few years, numerous factors, from sustained buyer demand to limited for-sale inventory in most markets, have caused home equity levels to climb significantly — and it looks like that trend isn’t over just yet. Home equity levels increased yet again in March, according to the May 2024 ICE Mortgage Monitor, leaving the average homeowner with about $208,000 in tappable home equity.
Home equity can be a smart option to consider if you’re a homeowner who needs to borrow money at an affordable rate, whether it’s to make necessary home renovations or repairs, consolidate debt or cover another large expense. And, there are multiple ways to borrow against your home equity, including home equity loans, which let you borrow a lump sum of cash, and home equity lines of credit (HELOCs), which give you access to a line of credit that can be drawn from as necessary.
And, those aren’t the only reasons that home equity borrowing could make sense to consider right now. If you’re wondering why you should borrow against your home’s equity in today’s economic landscape, there are some things you should know.
Find the best home equity rates you could qualify for here.
Home equity levels are rising: 3 reasons to tap in now
There are a few good reasons you may want to tap into your home equity right now, including:
Home equity loan rates are low comparatively
The Federal Reserve’s rate hikes over the last couple of years have impacted borrowing costs across the board, and that includes home equity products. But while today’s home equity loan and HELOC rates aren’t as low as they were during the height of the pandemic, they’re still a lot lower than the interest rates tied to many other borrowing options.
Right now, the average rate on a home equity loan is 9.66% while the average HELOC rate is 9.89%. That may not seem like a great deal, but it could be compared to a personal loan. After all, the average personal loan rate is hovering above 12% — so the sub-10% rate you can get on a home equity loan or HELOC could result in substantial savings over time.
And the same goes for credit cards. With the average credit card rate closing in on 22%, opting for a home equity loan or HELOC, even with a slightly higher-than-average rate, could mean paying much less in interest comparatively.
So while you may not be able to secure the ultra-low rates you could have in 2021 or 2022, today’s home equity rates are still a pretty good deal compared to your other options.
Learn more about your home equity borrowing options online now.
Home equity borrowing limits are typically higher
If you need to borrow a large sum of money, you may find that the limits on personal loans or credit cards are a lot lower than you expected. For example, the most you can typically borrow with a personal loan is about $100,000 — and very few lenders allow you to borrow that much with this type of unsecured loan. It’s much more common to see limits of $40,000 to $50,000 instead.
And, the average credit card limit is even lower than that. According to Experian, the average credit limit in the U.S. was $29,855 as of the third quarter of 2023. So, these options may not make much sense when you need access to a hefty borrowing limit.
Most home equity lenders, on the other hand, allow you to borrow up to 85% or so of your total home equity. Depending on how much equity you’ve built in your home, this could mean having access to tens or hundreds of thousands of dollars to borrow from. That can come in handy if there’s a significant expense you need to cover.
Borrowing could get more expensive in the future
It’s impossible to accurately predict what will happen with rates in the future. That said, we’re in the midst of an unusual economic environment. While today’s inflation rate is low compared to the 9.1% peak that occurred in mid-2022, at 3.4%, it’s still hovering well above the Federal Reserve’s 2% target rate.
And, should inflation continue to impact the economy, there’s a chance that the Fed could increase rates again at some point in 2024 to try and get it under control. And, if they do, home equity borrowing rates would almost certainly increase in tandem, making it more expensive to take out a home equity loan or HELOC.
So, if you need to borrow money, is it really wise to put it off? After all, borrowing costs can increase substantially with just a slight uptick in the interest rate, so waiting could be a gamble. But if you lock in a rate on a fixed home equity loan now, you’ll be protected from the negative effects of future rate increases while getting access to the funds you need.
The bottom line
If you’re a homeowner, today’s high home equity levels offer you a way to borrow money at a low rate, which is a pretty big win in this elevated-rate environment. And, tapping into your home equity could allow you to borrow large sums if you need to, especially compared to options like personal loans or credit cards. But if you’re going to borrow against your home’s equity, you may want to make your move now. After all, it’s tough to predict what could happen in the future, and if the Fed chooses to raise rates again to help fight against inflation, it could get a lot more expensive to do so.
CBS News
U.S. Marines, Japanese and Australian troops will train together amid heightened concerns over China
U.S. Marines will take part in joint training with Japanese and Australian forces in northern Australia, the three countries’ defense ministers announced Sunday as they expressed concern about a spate of confrontations with China’s increasingly assertive military.
Australia’s acting Prime Minister Richard Marles hosted U.S. Defense Secretary Lloyd Austin and Japanese Defense Minister Nakatani Gen for talks in Darwin, Australia.
The trilateral amphibious training between Australia, Japan and the U.S. Marine rotational force in northern Australia will begin in 2025 with Exercise Talisman Sabre. Australia will also join Exercise Orient Shield in Japan for the first time next year.
“Recognizing the critical role the trilateral partnership plays to uphold regional stability, we commit to trilateral policy coordination and to consult each other on regional security issues and contingencies,” they said in a joint statement.
In their statement, the three defense ministers reiterated “serious concern” about destabilizing actions in the East and South China seas including “dangerous conduct” by the Chinese military against Philippine and other vessels from the region. China claims the South China Sea almost in its entirety.
“We reiterate our strong opposition to any unilateral attempts to change the status quo by force or coercion,” they said, adding that it is “important that all states are free to exercise rights and freedoms consistent with international law.”
The ministers also urged the importance of peace and stability across the Taiwan Strait. China claims self-ruled Taiwan as its own territory and has stepped up military harassment with frequent drills around the island.
Marles, who is also Australia’s defense minister, said following talks with his Japanese counterpart in September that both nations looked to ways to build greater familiarity between their forces. One of the “obvious opportunities” was for Japan to participate in activities during the U.S. Marine rotation in Australia, he said Sunday.
“Having a more forward-leaning opportunity for greater training with Japan and the U.S. together is a really fantastic opportunity,” he said.
Asked if the increased military cooperation would anger Beijing, Marles said the decision was about building “the best relationships possible with like-minded countries, with our friends and with our allies.”
CBS News
Photographing the rooms of kids killed in school shootings
An unmade bed
A library book 12 years overdue
The next day’s outfit
Notes to her future self
Click on the door to enter
CBS News
How do you make a portrait of a child who isn’t there? Photographer Lou Bopp found a way, but it wasn’t easy.
In early 2018, I was deplaning after an 18-hour flight when Steve Hartman called. He had an idea: to photograph the still-intact bedrooms of kids who had been killed in school shootings.
It’s a headful. And six years later, I still don’t have an “elevator pitch” for the project — but then, I don’t often talk about this project. It is by far the most difficult I have ever worked on.
When Steve, my friend of about 25 years, asked me if I would like to be involved, I said yes without hesitation — even though I didn’t think we would get any families to agree. There is no way that I would have said no to partnering with him on this.
Emotionally, I was not sure how I would get through it. Within a few months I was on my way to Parkland, Florida. Alone. I’m not sure that I realized that I would be on my own.
But here I was. An on-location commercial photographer who focuses on people and pets to create compelling, honest, textural and connective moments for large brands, per my LinkedIn professional profile, on a project where there is no one to take photos of — for the most brutal of reasons.
How do you make a portrait of a child who is not there?
In each of these children’s rooms — the most sacred of places for these families — there was the sense that the child had just been there, and was coming right back. It was as if they’d just left their room like that when they went to school in the morning and were returning in the afternoon.
I wanted to capture that essence.
Most kids’ bedrooms are their very own special places, and these were no different. I looked everywhere, without touching anything. I photographed inside trash cans, under beds, behind desks. Their personalities shone through in the smallest of details — hair ties on a doorknob, a toothpaste tube left uncapped, a ripped ticket for a school event — allowing me to uncover glimpses as to who they were.
But there was an emotional challenge in addition to that creative one. Over the course of more than six years, we visited with many families around the country. The parents I spoke with seemed grateful that I was there. But each time I received a call or text from Steve about a new family, my heart sank.
It meant another family had lost a child.
I find it unfathomable that children being killed at school is even an issue. It makes no sense. It’s impossible to process. The night prior to each one of the family visits, I didn’t sleep. And I knew I wouldn’t going into the project. It’s not a self-fulfilling prophecy. It is nerves. And empathy. And sorrow. And fear.
In my notes from early on in the project, back in 2018, writing in seat 6H on the flight back from Nairobi, I reflected on the emotional task ahead.
“This is going to be one of the most difficult things ever, emotionally, for me, and not just work related. As I read my research documents, I get visibly emotional,” I wrote, noting my gratitude that the dark cabin prevented the other passengers from seeing me.
The prospect brought my own fears to the fore, both for myself — “I can’t help thinking about Rose,” my daughter, “and what if. I’ve lost sleep over envisioning the what-ifs well before Parkland” — and about and for meeting the families in the project: “When I read about April & Phillip and Lori’s plight, I somehow, for some reason put myself in their emotional position even though that is impossible, I have no idea, it’s beyond comprehension, I do not know what they feel. I do not know what I am going to say to them, I’m scared beyond belief. And alone.”
But just days later, I was photographing the first assignment for the project: Alyssa Alhadeff’s room. She was just 14 years old when she walked out of that room to head to Marjory Stoneman Douglas High School. I was shaky meeting the family friend who greeted me at the house. Her daughter was Alyssa’s best friend, and a photo of the two girls was on the table.
According to my notes, “The room was a beautiful teenager’s messy room. My emotions were kept in check the way that they usually are; By hiding behind the camera. I removed my shoes before entering. My heart was pounding and it reverberated through my body and soul, I felt like I was in one of the most sacred and special places on Earth. I was so careful not to touch anything.”
I left feeling ready to explode in sadness and anger.
Later that day, I photographed Carmen Schentrup’s room. Her younger sister had survived the Parkland shooting, but 16-year-old Carmen was killed in her AP Psychology class. Meeting her parents, April and Phillip, was what I was most scared of.
“I feel so much pain and compassion for them and I don’t want to say the wrong thing, drop cliches etc.,” I wrote at the time. “I spoke to Steve for guidance. He said, just be you. That’s all I can do. Just be me. He was right, those three words helped carry me through this entire project. Just be me.”
April let me in, and I worked quickly, only meeting Phillip as I was leaving. “The conversation felt like we all three were just trying to hold it together. I cannot imagine what they are going through, my heart hurts for them. This was / is such a painful project, and reconciling it will be impossible.
“I think about how anything can happen at any time to any of us. Literally. You never know,” I wrote.
After only about 16 hours on the ground in Florida, I was done with the first portion. I felt the project was a must, but I also dreaded the next call from Steve about the next family. I didn’t know when that call would come — many years later, or the very next day, possibly never.
But last month, we — and the documentary crew that filmed us working — completed this project. While I haven’t seen it yet, I know Steve’s piece won’t be a typical Steve Hartman segment. How could it be? I know he struggled too, and we both have spent a lot of time processing this.
I remember one August evening, I was devastated as I left the home of one of the families. Within minutes, I passed an ice cream shop crowded with other families — seemingly carefree, full of joy and laughter. The juxtaposition, mere minutes apart, cracked my soul.
I hope some way, somehow, this project can facilitate change — the only possible positive outcome for this I could comprehend. After the news cycle ends, these families will still be living with an incomprehensible nightmare.