News

Whether you’re buying a first home or an existing owner, homeownership is an accomplishment worth celebrating. June marks National Homeownership Month – and what is often the start of the busy summer homebuying season.

National Homeownership Month began as National Homeownership Week in 1995 and was expanded to a full month in 2002. The goal was and is to emphasize that owning a home is a big step toward achieving the American dream.

“We believe sustainable homeownership creates a path to wealth building, and we believe that helping individuals and families create that pathway responsibly is a privilege,” said John Hummel, head of home lending production at U.S. Bank.

Realizing the dream of homeownership

The American dream of owning a home is very much alive and well. Nearly two-thirds of households in the U.S. own their own home.^[1] And despite challenges, the homebuying market remains active across the country. According to Realtor.com, more than 4.7 million new and existing homes were sold last year.^[2]

However, it’s not a one-size-fits-all market. Across all life stages – from buying a first home to downsizing, purchasing a second home or improving an existing home – homebuying is a big decision. It can seem overwhelming, stressful and even a little scary, but it doesn’t have to be. Every type of homebuyer has different considerations and challenges, but an experienced mortgage loan officer (MLO) can help you work through them with ease.

The common theme across all stages is that education, planning and early conversations with your MLO can help create a better experience to support your homeownership goals.

First-time homebuyers: Looking for guidance

The news headlines are not wrong: First-time homebuyers face very real challenges in the current market. According to the National Association of Realtors, the share of first-time homebuyers dropped to a record low of 21% in 2025.

“Affordability continues to be the No.1 issue in today’s market. Sustainable homeownership is central to our mission at U.S. Bank and helping customers with down payment assistance options available to them or simply understanding the full cost of homeownership so they can plan accordingly is the benefit of working with an MLO,” Hummel said.

How to address affordability challenges

If you’re a first-time homebuyer, there are ways to navigate affordability challenges. These include:

• Understanding your buying power and the total cost of homeownership.
• Working with your MLO to understand what down payment assistance options you may have available to you
• Understanding that there are mortgages that do not require 20% down.
• Working with your MLO to get prequalified when you start looking at homes, so you know your price range and can move quickly. While inventory has increased in some geographies, it remains an overall competitive market and being pre-qualified can be the difference between securing a home you love or looking for another.

The importance of homeownership education

Education and planning are a critical part of the homebuying process, especially for first-time buyers.

“The more informed you are about product options, down payment options and the total cost of homeownership, the more confident you will be when you find your first home,” Hummel said. You can work with your MLO to build a plan that gets your finances ready for homeownership.

Steps can include:

• List and assess your debt: Create a spreadsheet of all loans, credit cards, balances, minimum monthly payments and interest rates.
• Calculate your debt-to-income (DTI) ratio: Divide your total monthly debt payments by your gross monthly income (your income before taxes and other deductions). A general rule of thumb is to aim for less than 35% to 43%.
• Prioritize payments: Make a plan to reduce credit card and other debt.
• Stop taking on new debt: Avoid opening new credit cards or financing large purchases while preparing for a mortgage.
• Boost your credit score: Keep credit card balances below 30% of their limits and ensure all payments are made on time.

Current homeowners: Improving or leveraging home equity

People are staying in their homes longer for a variety of reasons. The average seller during the fourth quarter of 2025 had owned their home for an average of about 8.5 years, according to Attom.^[3]

Some owners are experiencing the “lock-in effect” and don’t want to give up their current low mortgage rate. Others are attached to their homes for personal reasons, such as friends in the neighborhood or they don’t want their children to change schools.

At the same time, homeowners need to make periodic investments in their home, such as expansions, kitchen remodels or new backyard patios.

If you’re looking to fund a renovation, consolidate debt or build a financial cushion, a home equity loan or line of credit (HELOC) can offer flexible access to funds.

Tips for how to use home equity strategically

Here are five steps from U.S. Bank’s mortgage lending professionals that can help you understand your home equity and how to use it wisely.

Figure out how much of your home equity you can borrow against
Tappable home equity is the amount that can be borrowed against with the homeowner maintaining an equity stake in the home, typically at least 20%. Most lenders allow borrowers to access up to 80% of their equity. For example, if your home has a current market value of $380,000 and you still owe $240,000 of the loan, here is how you can calculate potential equity available for a home equity loan or line:

• $380,000 is the current market value of the home
• 80% of the property value is $304,000 and that determines your maximum combined loan-to-value (CLTV).
• $240,000 is the amount you still owe.
• $304,000 (CLTV) - $240,000 = $64,000 available for a Home Equity loan or line.

U.S. Bank offers a free online home equity calculator to help you estimate what home equity rate and monthly payment you might qualify for. This calculator factors in your mortgage balance, property value and other criteria.

1. Explore your borrowing options. The two most common ways to borrow against the equity in your home are:

• A home equity loan, which is a lump sum you repay over time with fixed monthly payments.
• A HELOC, which acts as a revolving line of credit that you can draw from as needed.

2. Think about what you want to use your home equity loan for. About 40% of U.S. Bank customers are using HELOCs or loans for home improvements. Other common uses of funds include debt consolidation or accessing funds to pay for a major expense, such as college tuition. Home equity loans and HELOCs can be cost-effective ways to borrow because they are secured by underlying collateral: the property.

3. Be aware of what to avoid. While home equity can be a smart financial tool, it’s important to borrow only what you can repay. Avoid using it for high-risk investments or luxury purchases that don’t offer long-term value and could stretch your budget.

4. Make sure borrowing fits your financial situation. Before tapping into the equity in your home, take time to review your financial goals and current finances. A mortgage loan professional can help assess whether this is the right solution and determine your eligibility, borrowing power and how it fits into your broader financial goals.

Current homeowners: Moving up, downsizing or investing

Even for those who have no desire to move, the reality is that life happens. Families grow and need more space. Children eventually grow up, and empty nesters need less space. Along the way, there might be a divorce, new job or desire to buy a vacation home or even an investment property.

In many cases, existing homeowners have built equity in their homes over time that they can leverage, whether they are moving up, downsizing or investing. If you think about your home as a wealth-building opportunity, you might have options that include:

• Taking out a HELOC that can provide a down payment for an investment property.
• Using the equity in your home to pay cash for a smaller home.
• Using the equity in your home to provide a larger down payment to move to a larger home.

Deciding which option is best depends on your individual financial situation. Many factors come into play here that are based on the property in question, current equity, overall financial situation, overall financial goals and potential tax implications.

Take advantage of a mortgage loan officer’s experience

“We believe sustainable homeownership creates wealth building opportunities, and — as likely the largest purchase an individual or family makes —  can support overall financial goals. Yet the path to homeownership looks different for everyone,” Hummel said. Whether you're buying your first home, next home, vacation property, exploring investment opportunities, or tapping into your home’s equity, connect with your mortgage loan officer or find an MLO who can help you navigate your options.

^[1] “Homeownership rate in the United States. Federal Reserve Bank of St. Louis. April 2026. FRED graph. 

^[2] Griffith, Keith. (2026, March 9.) “Total Home Sales Last Year Were Weakest in 14 Years.” Realtor.com. 

^[3] “U.S. Homeownership by State – Q1 2026.” Attom. January 2026.