Home prices and mortgage balances have shifted so dramatically over the past decade that many Americans now hold far more equity than they realize. But having a lot of wealth tied up in your home doesn’t automatically mean you’re financially secure. Real estate and tax experts said there are clear equity thresholds that determine when you’re genuinely “house rich” and what that actually means for your finances.
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What It Really Means To Be ‘House Rich’ in 2026
Being “house rich” isn’t just about owning an expensive home — it’s about how much equity you’ve built and how concentrated your wealth is in your property.
Cameron Saemann, realtor at Second Story Realty, suggested you’re house rich when the percentage of equity in the property is “siloed to the asset itself vs. a scenario where a person’s net worth consists mostly of real estate equity.”
However, John Ornelas, director at North Texas Tax Advisors, suggested it could also mean that your home equity makes up a large share of your net worth, even if your day-to-day cash flow feels tight.
Another way to put this, according to Aaron Perez, CEO of Sell Your San Antonio House, is that “equity is your aggregate wealth.”
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The Equity Percentages That Signal You’re House Rich
No matter which threshold you use to determine if you’re house rich or not, the consensus is that 30% equity is meaningful but not necessarily rich, whereas around 50% and up marks true house-rich territory. Higher equity means more room for renovations, selling costs and financial cushion.
“I generally consider a homeowner house rich when they have at least 60% equity or when home equity represents over half of their total net worth,” Ornelas said. Though Perez put that figure higher, at 70%.
How Today’s Home Equity Levels Compare
The average U.S. homeowner has far more equity today than in prior decades, thanks to rapid appreciation and low inventory, Saemann said. Perez said the average American homeowner holds an estimated value of around $300,000 in equity. But “average equity” doesn’t automatically qualify someone as house rich, especially in high-cost states.
“The typical U.S. homeowner currently has equity in that range, but high-cost states often require far more before someone feels financially secure,” Ornela said.
The Pros and Cons of Being House Rich but Cash Poor
High equity can look great on paper, but it’s not a substitute for liquidity. When too much wealth is tied up in a home, in essence being “house rich but cash poor,” Orenlas said, homeowners may struggle to find ways to pay for emergencies, repairs or income disruptions, even while sitting on hundreds of thousands in equity.
In those situations, “The only way to tap into the equity is to sell the property or borrow against it,” Saemann said.
It also underscores the importance of having a solid emergency fund. “With a cushion of less than six months, you might find yourself cash strapped despite having a good equity profile,” Perez said.
Practical Ways To Build Home Equity Faster
If homeowners want to reach house-rich status sooner, there are several strategies beyond simply waiting for the market to rise. Saemann suggested making an extra mortgage payment per year or paying bi-weekly to “use the amortization schedule of the loan in your favor.”
Ornelas added that homeowners can also build equity faster by improving the property in ways that increase its appraised value or refinancing to shorten the loan term when rates allow.
How To Stay Financially Balanced When Your Equity Grows
Even with strong equity, the experts stressed the importance of balancing home wealth with adequate cash reserves. “Too much wealth tied up in a home becomes risky when it limits liquidity,” Orenlas said. Homeowners who rely too heavily on property value may feel secure — until they’re hit with a major expense.
“You might find yourself cash strapped despite having a good equity profile” without the right runway of savings, Perez added.
By understanding the equity benchmarks that define true financial strength, homeowners can build wealth more strategically and avoid confusing paper gains with real stability.
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This article originally appeared on GOBankingRates.com: How Much Home Equity You Need To Be Considered ‘House Rich’
