> you only have one home, real estate appreciation only makes you money if it’s higher for your house relative to others, since if you sell your house and buy another house of comparable quality that’s also appreciated to a similar degree, you wouldn’t come out ahead.
Equity can be leveraged meaningfully without selling, so that's not true.
Besides HELOCs, what are you referring to? A HELOC is just a tool for getting lower interest rates on another loan, which only would make you wealthier if you happened to invest it in some other appreciating asset with an extremely high ROI.
> A HELOC is just a tool for getting lower interest rates on another loan
Yes, paying less money if you have to borrow to meet the same emergent need or opportunity as another person makes you richer than the one who pays more.
A HELOC is, literally, a line of credit. You can do anything you want with that money: start a business, go to college, buy bitcoin, buy another property, etc.
... anything you want, but you have to repay what you borrowed? It's true the interest rate is likely better than many other kinds of credit, but it's still a loan.
I'm sort of at a loss for understanding the misunderstanding here. Someone without equity in their home probably cannot get a loan of any sort. Access to capital, as a loan or any other form, is a huge thing. So if your home gives you access to that loan, this is important.
Most people don't have a use for a line of credit other than to spend it on things that don't make them any money. Everyone I know that did this used it to say, pay off a bunch of credit card debt, or build a new kitchen that will be worthless by the time they sell their house anyways.
> Most people don't have a use for a line of credit other than to spend it on things that don't make them any money.
Even if that were true (it's really not—it may be at any one moment but over a substantial period of years people tend to have emergent needs and opportunities that not having access to capital, or higher cost access to capital, either misses with real costs or pays more with, quite obvious, real costs) people tend to borrow and spend money on things that don't make money fro time to time; if you have a lower financing costs for such frivolous purchases, you are richer than someone who has the same spending pattern with higher financing costs.
just because you cannot think of a use for such a line of credit, doesn't mean that having the option is useless. And even if most people mis-use this line of credit, it is still an option that's not available. Availability of options is in itself valuable.
And i really dont think people are dumb and cannot think of productive uses for such a line of credit.
Equity can be leveraged meaningfully without selling, so that's not true.