State of Home Equity: South Market Briefing

The South is growing quickly - almost twice the national rate from 2020 to 2025- but growth alone does not define home equity opportunity in the region.

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Southern states have significant differences in borrower financial profiles, equity positions, and competitive pressure. That means the path to home equity growth can look very different from one state to another.

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In this 30-minute briefing, we break down the homeowner and market data shaping home equity opportunity across the South, including:

• Why borrower profiles vary significantly across the region-and why segmentation is not optional
• How high free-and-clear homeownership creates a distinct opportunity in several Southern states
• Why large markets such as Florida and Texas need operational capacity as much as demand generation
• How non-bank lenders are shaping borrower expectations around access, speed, and the digital experience
• Three growth models emerging across Southern states: Scale & Capacity, Relationship & Education, and Borrower Precision

The goal is to help community banks and credit unions understand what kind of opportunity exists in their market, and how their home equity strategy may need to adapt around it.

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Watch the South Market Briefing →

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Three growth models stand out in the South.

Some Southern states offer enormous homeowner populations and high levels of competitive activity. Others have large concentrations of homeowners who own their properties outright. And across the region, borrower financial characteristics vary enough that broad, one-size-fits-all targeting can overlook meaningful differences in who is positioned to borrow and why.

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That means the strategy to home equity growth won't look the same everywhere.

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For Southern community lenders, three growth models begin to emerge. And, these models intentionally overlap because a state may face more than one growth condition at the same time:

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Scale & Capacity

Florida, Texas, Georgia, North Carolina, & Tennessee

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These states combine some of the South's largest homeowner populations with significant home equity marketing activity and competitive pressure.

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For lenders here, growth is not simply about generating more demand. The opportunity is to create enough visibility to reach a large addressable market and build the operational capacity to convert that demand efficiently.

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If application volume increases, straightforward borrowers still need to move quickly. Manual work, unclear communication, and slow processing can turn a successful marketing campaign into a larger pipeline without a corresponding increase in funded loans.

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That means growth requires the combination of visibility, operational capacity, and a borrower experience designed to convert.

Relationship & Education

West Virginia, Mississippi, Louisiana, Arkansas, Alabama, Oklahoma, & Kentucky

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These markets include some of the South's highest levels of free-and-clear homeownership, while several also have more modest average equity amounts.

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That creates a very different home equity opportunity.

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A homeowner who paid off their mortgage years ago may not think of themselves as a home equity borrower at all. They may need more education around the difference between a home equity loan line or credit, how they differ from a personal loan, what placing a new lien on their property means, etc.
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For community lenders, this can be a relationship-driven opportunity: identify homeowners who already know and trust the institution, make the option understandable, and ensure the product and process fit potentially smaller borrowing needs.
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Borrower Precision

Virginia, North Carolina, Tennessee, South Carolina, Kentucky, & Oklahoma
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A Southern borrower profile does not line up neatly from one state to another. Credit, income, debt-to-income ratios, and other financial characteristics vary significantly across the region, which makes borrower segmentation a non-negotiable.
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For lenders in these states, growth may depend less on simply reaching more homeowners and more on identifying the right borrower, with the right use case, at the right time.
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That means looking beyond a one-size-fits-all, generic campaign and considering the combination of capacity, collateral, and current need to identify priority audiences.
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The opportunity is to use relationship and property data to create more relevant outreach and make it easy for appropriate borrowers to explore their options.

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Growth creates opportunity, precision determines how much of it you capture.

The South's rapid growth is expanding the potential home equity market, but market growth by itself is not a strategy.

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Community lenders still need to understand who the borrower is, what need makes home equity relevant to them, how much demand internal operations can support, and what kind of experience borrowers are being conditioned to expect.

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That is the South version of market-informed lending: recognizing the growth conditions in your market and building your targeting, borrower experience, and lending strategy around them.

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Want to explore the data for your own state?

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