US homeowners are now sitting on record-setting $17 trillion in home equity — and these 5 West Coast housing markets account for nearly 25% of that staggering sum

West Coast has most equity

The ICE report identifies just five markets on the West Coast as responsible for about a quarter of that $11 trillion equity figure: Los Angeles, San Francisco, San Jose, San Diego and Seattle. That four of the five are in California dovetails with another rich fact of real estate life: Roughly one-fifth of the nation’s total housing value is in California, making it the nation’s most valuable market, according to Zillow.

And in Seattle, median home prices went up106%, from $401,679 in 2013 to $826,592 in 2023, per figures compiled by Construction Coverage, a construction industry website. And while you might think that the mass exodus from San Francisco might’ve hurt home prices, that’s not the case. While the 378 homes sold in March 2024 were down from 420 in March 2023, prices rose 4.2% year over year, putting the median sales price at $1.4 million, according to Redfin.

All of this goes hand in hand with earning power that allows many homeowners to stay invested in valuable property. CareerBuilder ranks San Francisco, San Jose and Seattle first, second and third for top average salary, with Los Angeles finishing 10th.

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Home equity, HELOCs and healthy decision making

As the May 2024 Mortgage Monitor report uses the word “tappable,” it’s no surprise that part of it drives at how consumers could put their equity to work. Tappable equity refers to how much a homeowner can leverage and still retain a 20% equity cushion in the property. This currently works out to roughly $229,000 per mortgage holder.

One of the most popular ways to utilize this money is through a home equity line of credit or HELOC. It’s not so much a loan as revolving credit with a variable interest rate, secured by the amount you’ve paid off on your mortgage. It typically lasts anywhere from five to 15 years.

On the upside, HELOC funds can be poured back into your home for improvements that may further drive up its value. It’s also a popular way to finance big-ticket expenses such as college tuition and an option to consolidate high-interest debt. Moreover, any drop in interest rates per the Federal Reserve will positively affect HELOC rates.

But falling behind on a HELOC can wreak far more havoc than with an ordinary bank loan. Because you secure it with your home, a default can lead to the lender taking possession of the property. It’s wise to have meaningful reasons for using the credit and not treat it as proverbial funny money.

Whether you live out by the Pacific, or in any area where your tappable equity is overflowing, consider yourself fortunate. You’re living in an opportune time like no other, able to enjoy a financial home sweet home run.