National home equity trends don’t tell the whole story. Your state does.

It's hard to read a housing or lending publication today without seeing a statistic about historically high tappable home equity levels.

Home values remain well above pre-pandemic levels. Millions of homeowners now have substantial equity available. Home equity lending activity is growing, and many analysts expect that momentum to continue.

Those headlines aren't wrong, but they're incomplete.

For community banks and credit unions, national averages only answer one question:

Is there opportunity in home equity?

And that answer is yes.

The more important question—the one national data can't answer—is this:

What does opportunity actually look like in my market?

Because the conditions that create home equity opportunity in Connecticut aren't the same as those in Florida. The borrower profile in Iowa looks very different than in California. And the competitive landscape in Kansas bears little resemblance to Idaho.

If your lending strategy starts and ends with national statistics, you're missing the information that matters most.

National data is valuable because it confirms the opportunity. But your local data should be what defines your strategy.

Every market has homeowners with equity, but not every market presents the same home equity opportunity. The mix of borrower characteristics, equity depth, and competitive pressure varies from state to state.

Two lenders can both be operating in strong home equity markets and still face very different realities. One may serve borrowers with exceptional financial profiles but modest equity. Another may have abundant homeowner equity but intense competition from non-bank lenders.

Understanding those differences is what turns a national trend into a market-specific strategy.

To better understand how home equity opportunity changes across the country, Coviance analyzed all 50 states through three lenses designed to capture not just how much opportunity exists, but what type of opportunity community lenders may be likely to encounter.

Homeowner equity is only one piece of the equation.

To better understand each state's lending environment, we evaluated three dimensions that together paint a more complete picture.

This score measures the underlying strength of the market itself.

It looks beyond today's home values to consider factors such as homeowner equity, housing appreciation, homeownership trends, and the overall size of the addressable market.

A state with high market potential has meaningful opportunity—but not necessarily the easiest borrowers or the least competition.

Not every homeowner with equity is positioned to borrow.

Borrower quality evaluates the financial characteristics that influence qualification and repayment, including debt levels, debt-to-income ratios, delinquency trends, credit profiles, and homeowner income.

Two states may have similar equity levels while producing dramatically different lending outcomes because borrower readiness looks completely different.

Opportunity isn't just determined by borrowers.

It's also shaped by who else is competing for them.

Competitive intensity measures the level of home equity lending activity and competitive pressure within each market, helping identify where community lenders face heavy digital competition—and where relationship banking still provides a meaningful advantage.

Once we evaluated every state through those three lenses, something became immediately clear.

No two markets tell the same story. Here’s a few examples:

California offers one of the largest home equity opportunities in the country, with average homeowner equity exceeding $348,000.

But borrowers also carry some of the nation's highest debt levels, while non-bank lenders dominate the home equity conversation.

Success here depends less on finding opportunity than on competing operationally—through speed, borrower experience, and current membership activation.

At first glance, Iowa appears less attractive because average homeowner equity sits well below the national average.

Yet borrower quality tells a different story.

Delinquency rates are among the lowest in the country. Debt-to-income ratios are exceptionally healthy. Homeowners carry relatively little debt.

Loan sizes may be smaller, but the borrower profile creates an entirely different kind of opportunity.

Kansas and Idaho illustrate why competition matters just as much as borrower fundamentals.

Kansas has one of the lowest levels of non-bank home equity activity measured in the report, creating a market where community lenders have a meaningful competitive advantage.

Idaho, meanwhile, combines strong borrower fundamentals with one of the highest levels of non-bank home equity activity, requiring community institutions to fight much harder simply to earn borrower attention.

Both are attractive markets, but neither should be approached the same way.

Rather than asking:

Is home equity growing?

Community lenders should ask:

Because home equity opportunity isn't the same everywhere, and your strategy shouldn't be either.

National trends tell us home equity remains one of the strongest lending opportunities available to community financial institutions.

Local data tells us how to best capture for it.

That's why we created The State of Home Equity: A Market Strategy Report. The report analyzes all 50 states through the lenses of Home Equity Market Potential, Borrower Quality, and Competitive Intensity, providing community lenders with state-specific insights designed to help them better understand the opportunity in their own markets.

Whether your institution operates in one state or several, understanding your local market is the first step toward building a home equity strategy grounded in data rather than assumptions.

Explore your state's profile on our interactive map and see how market dynamics are shaping home equity opportunity across the country.