When Linda Boroski bought her three-story Queen Anne home with a wraparound veranda in Bellevue, Ohio, in 2021, she made sure it fit her budget.
“My mom taught me, ‘We like to cross our t’s, dot our i’s, and we pay our bills on time,’” said Ms. Boroski, a 63-year-old retired schoolteacher.
So she was concerned when she ran up $26,000 in credit card bills to pay for travel for medical treatment. It meant putting off renovations for her drafty house and visiting her family less.
“I was so strapped each month,” she said.
When Ms. Boroski got an offer from Rocket, a mortgage broker, for a home-equity loan, she took out $45,000, paid off her bills and bought new windows. And she still has a little left over for a trip to see her granddaughter.
Americans continue to spend freely, keeping the economy humming, even as they amass more credit card debt. But like Ms. Boroski, many homeowners have built up a nest egg to help pay for their lifestyles: $35 trillion in home equity, a record high.
“People are sitting on all this money,” said Daryl Fairweather, the chief economist at Redfin, a real estate brokerage firm. “So they pull some of that equity out of their home to pay off their credit card debt.”
Household debt increased 3 percent in the first quarter of 2026, to $18.8 trillion, from a year earlier, according to a report from the Federal Reserve Bank of New York, using data not adjusted for inflation. Mortgages made up the biggest chunk of that total, but credit card balances climbed 6 percent to $1.25 trillion from the year before.
In the same three months, homeowners withdrew an estimated $47 billion in equity, up 2 percent from the same period in 2025, according to a report from the Intercontinental Exchange, a financial services company. Second mortgages amounted to $25 billion, a 1 percent increase from a year earlier, but refinancing existing mortgages to take cash out jumped 18 percent year over year to $22 billion.
The accumulation of housing wealth is partly a result of a moribund property market. Soaring home prices and rising mortgage rates have made buying a home less attainable, slowing home sales. Homeowners who secured mortgage rates as low as 3 percent just a few years ago are reluctant to put their homes on the market. They have built up an average of $310,500 in home equity, according to a recent report by Cotality, a housing market data provider.
“That equity provides an important financial cushion as everyday costs continue to rise,” Selma Hepp, Cotality’s chief economist, wrote in the report.
That enormous wealth comes with a caveat: Because it is tied up in their homes, owners have to refinance their mortgage to take advantage of it. Still a home loan at 6.69 percent — the average rate for a 30-year, fixed rate mortgage, according to the mortgage finance giant Freddie Mac — is a better option than credit card debt with an interest rate in the double digits, financial experts say.
“Nobody really talks about their credit card rates being 23 percent,” said Alex Elezaj, the chief strategy officer at United Wholesale Mortgage, a mortgage lender that works exclusively with independent brokers. “They are paying minimum payments, and they kick the can down the road.”
But as revolving debt mounts, he is seeing more homeowners looking to refinance their mortgage. To be sure, sometimes the money goes to renovating the home or paying for a vacation, but more often, he said, it is used for credit card or student loan payments.
“Most people are looking at it as a way to bring down their overall household interest rate,” he said.
Financial brokers are seeing more refinancing activity across the country, as more people seek to pull themselves out from under a pile of bills.
The average debt per cardholder grew 22.7 percent from 2018 through last year, to $7,161, according to a report from the Century Foundation, an independent think tank. (For comparison, cumulative inflation in the same period rose 28.2 percent.)
But Stacy Melton, a broker in Gilbert, Ariz., said the people who come to her for help carry an average of $20,000 to $50,000 in credit card debt, and sometimes as high as $90,000.
Hoping to avoid refinancing their mortgage in order to hang on to their low rate, many request a new line of credit using their home equity as collateral, but the math never works out because the rates on most home-equity lines are too high.
“You are basically trading apples for apples at that point,” said Ms. Melton, who recommends refinancing, even if the homeowner snagged an ultralow rate when buying the home.
But as more Americans use their homes as emergency slush funds, Ms. Fairweather worried that the activity could put them at risk if the economy starts to tumble.
“They might be in a situation where they have to sell their home because they can’t pay that refinanced mortgage,” she said.
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