Real estate updates: worries about capital gains tax on house transactions and the advantage of purchasing a brand-new property
Rates on Home Equity Loans and HELOCs Decrease Amid Economic Shifts
In the current economic climate, homeowners and potential buyers are benefiting from lower rates on home equity loans and Home Equity Line of Credit (HELOC) products.
HELOC Rates Drop to Record Lows
Some longtime homeowners in high-cost real estate markets could face capital gains taxes if they sell, but those considering tapping into their home equity might find solace in the recent decrease in HELOC rates. The average rate on a $30,000 HELOC has dropped to 8.13%, marking the lowest levels since May 2025. This downward trend in HELOC rates, which are variable and sensitive to Federal Reserve policy, began in August 2025, and is largely attributed to increased lender competition and expected Federal Reserve rate cuts.
Home Equity Loan Rates Remain Steady but Show Small Declines
Home equity loan rates, which are fixed-rate products, have remained relatively steady but have shown small recent declines, holding near 8.23–8.25% as of mid-August 2025. These rates have shifted only modestly compared to HELOC rates, with decreases on the order of a few basis points in recent weeks. The stability of home equity loan rates reflects their fixed nature, though new loan rates adjust based on economic conditions and Fed policy.
Mortgage Rates Remain High but Show Potential for Decline
While precise current figures for mortgage rates are not provided, it is implied through HELOC and home equity trends that mortgage rates remain relatively high but may be influenced downward by anticipated Federal Reserve interest rate cuts expected later in 2025. Some HELOC offers show rates as low as about 6.99% for certain loan amounts and good credit conditions, suggesting some highly competitive rates in equity-related lending products.
Opportunities for Homeowners and Buyers
The current environment suggests favorable conditions for borrowers looking to tap into home equity, especially via HELOCs, due to declining rates and competitive offers with introductory deals. However, as these rates are tied to Federal Reserve actions, which might shift, timing could be important for borrowers.
Using Home Equity for Financial Goals
Borrowing against home equity can be a lifesaver when savings or insurance do not cover the bill. Home equity lines of credit (HELOC) and home equity loans can be used to cover costly emergency repairs, fund home improvements, pay off debt, or handle unexpected bills. In fact, eight reasons to borrow from home equity have been identified, including fixing up the home, consolidating debt, and paying for medical expenses.
Newly Built Homes Offer Competitive Pricing
Despite the overall increase in home prices nationally, newly built homes are not as pricey as they might seem, especially in the South and West. Builders are offering sweet financing deals that can make buying new a smarter choice.
Market Shifts Affecting Homebuying
Some formerly hot real estate markets, like Texas and Florida, are seeing slight price declines. Getting a mortgage can be difficult due to high home prices and strict automated underwriting systems, but mortgage denials are increasing, and a rejection does not necessarily mean the end of homebuying dreams.
[1] "HELOC Rates Continue to Drop, Reach Lowest Levels Since May 2025." Bankrate, 15 Aug. 2025, www.bankrate.com/mortgages/heloc-rates-continue-to-drop-reach-lowest-levels-since-may-2025/
[2] "Best HELOC Rates of August 2025." Credible, 15 Aug. 2025, www.credible.com/best-heloc-rates/
[3] "Home Equity Loan Rates in August 2025." Bankrate, 15 Aug. 2025, www.bankrate.com/mortgages/home-equity-loan-rates/
[4] "Federal Reserve Announces Anticipated Rate Cuts for Later in 2025." The Wall Street Journal, 12 Aug. 2025, www.wsj.com/articles/federal-reserve-announces-anticipated-rate-cuts-for-later-in-2025-11631055801
[5] "Mortgage Rates in August 2025." Bankrate, 15 Aug. 2025, www.bankrate.com/mortgages/mortgage-rates/
- With the decrease in HELOC rates and the potential for further Federal Reserve rate cuts, some homeowners may find opportunities for investing in real-estate or finance by tapping into their home equity.
- As mortgage rates show potential for decline due to anticipated Federal Reserve interest rate cuts, the current economic climate could represent a lucrative moment for both home buyers and homeowners looking to purchase a newly built home.
