DMV Gen Xers' wealth is locked up in homes
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Illustration: Brendan Lynch/Axios
Roughly seven in 10 Gen Xers own their homes, but accessing that equity isn't easy.
Why it matters: Many Gen Xers are house-rich but cash-poor.
The big picture: Nearly half of Gen Xers say they feel behind on retirement savings, according to a Bankrate study.
- Roughly two-thirds of Gen Xers say they're uncomfortable with their level of emergency savings, and 22% have no emergency savings at all, per the study.
The intrigue: U.S. homeowners are sitting on $31.7 trillion of home equity, but unlocking that cash could unleash fees like higher mortgage rates.
What's happening: People are only doing cash-out refinances when they have to, according to Urban Institute housing expert Laurie Goodman.
- These folks typically have lower credit scores and have exhausted other cash resources like savings, she says.
- Of the people who refinanced in the first half of 2023, nine in 10 were cash-out, per Freddie Mac.
Consolidating debt is one major reason people are tapping into their home equity, Loan Pronto CEO Roger Moore tells Axios.
- Borrowers are also opting to expand or renovate their current home instead of moving, he says.
Zoom in: When Deborah Eichhorn and her husband refinanced, they took around $100,000 of equity out of their Bethesda home to help fund their kids' college savings.
- Instead of contributing from their regular flow of income, they're letting those large deposits grow over time.
Be smart: People with a 700+ credit score can use HELOCs or HELOANs to keep their primary mortgage rate and access additional cash/credit.