That kitchen you keep reimagining in your head…
The bathroom that’s been waiting a little too long for a refresh…
Or that outdoor space you always say you’ll get around to someday…
What if you already have everything you need to finally make it happen? Because more and more homeowners are starting to realize exactly that.
Homeowners are expected to spend over $522 billion on home improvements by the end of 2026, and they’re not draining their savings to make it happen. Many are using their home equity instead.
And if you’ve owned your home for more than 10 years, you might be able to use your equity to help pay for some upgrades too. Here’s what you should know before getting started.
What Is Equity? And How Does It Help?
Equity is simply the difference between what your home is worth and what you still owe on your mortgage.
And according to Cotality, the average homeowner has about $313,000 in equity today. That’s more than enough to finally check a few projects off your list. More and more people are realizing they can use it to give their home a little TLC.
Research from Meridian Link shows that home improvements are the top reason people are using their equity right now.
Top Reasons People Are Borrowing Against Their Home Equity:
Funding home improvements (45%)
Paying down other debts or consolidating debt (16%)
Investing in other properties (16%)
Maybe it makes sense for you to do the same. But here’s what’s important just because you can use your equity doesn’t mean you have to. And not every project will be worth it either.
What Projects Are Actually Worth It?
If you decide to go this route, it’s smart to focus on upgrades that truly add value. A good renovation should improve your home, not just change it. And even if selling isn’t on your mind right now, it’s still worth making choices that set you up for success later on.
And a real estate agent is a great resource when you’re weighing your options. They know what other homeowners are doing and what buyers in your area tend to prefer, which can really help you narrow down your project list. As the National Association of Realtors (NAR) puts it:
““Being able to help sellers prioritize home improvements and maximize their net on the sale is a key value real estate agents offer.”
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Here’s a quick look at the projects with the best potential to help you recoup your costs, according to NAR (see graph below). It’s a helpful starting point, but it still can’t replace the insight an experienced agent can offer.
As you can see, there’s a wide mix of projects on that list. Some are bigger investments like kitchens or bathrooms, while others are smaller updates that can still deliver a surprisingly strong return.
A new front door is a great project, but it’s probably not the kind of thing you’d want to use your equity for. On the other hand, something like a kitchen remodel is where your equity can really help take the pressure off the cost.
Where To Go from Here
Whether the project you’re considering is on this list or not, it’s a good idea to talk with a real estate agent first. They can help you figure out if it’s really worth the time, money, and effort before you start calling contractors.
Because the goal isn’t to do it all, it’s to focus on the upgrades that really make a difference.
And if you’re thinking about using your equity for a bigger project, it’s a good idea to talk with a financial advisor as well. They can help you make sure you still keep a healthy loan-to-value (LTV) ratio after tapping into your equity, so you have all the information you need to make a confident decision.
Bottom Line
Whether you’re planning to sell next year or just want to give your home some TLC, the right improvements now can set you up for success later. And the best part is, your equity might be what helps make it all possible.
What’s one upgrade you’ve been thinking about and wondering if it’s really worth it?
Let’s talk for a minute about whether it’s the right move for your home.
