Real Estate

House Rich Cash Poor: The Homeowner Dilemma

By Tom Burchnell
house rich cash poor

Being house rich and cash poor is a common problem that homeowners face. Follow along to learn helpful tips on how to avoid this dilemma.

What does it mean to be house rich and cash poor? While this phrase might sound like an oxymoron, it’s actually fairly common, with 73% of American homeowners reporting that they feel house rich, cash poor at least some of the time. 

If you’re house rich, cash poor, it simply means that you have equity and wealth bound up in your home, but are unable to experience its benefit on a day-to-day basis. In some cases, you might not have the spending money you’d like for vacations and luxuries. In others, you could be living paycheck to paycheck or struggling to pay off other debt.

In this article, we’ll cover what it means to be house rich, cash poor, and we’ll also discuss ways to avoid it as a homeowner yourself with our home equity loan alternative options. 

What Does It Mean to be House Rich and Cash Poor?

As we’ve briefly covered, the term “house rich cash poor” is a phrase used to describe homeowners who have more equity tied up in their homes than they have cash in the bank. 

As a homeowner, you build up equity in your home over time:

  • As you make monthly mortgage payments, you lower the amount of your loan and increase your equity.
  • Property values tend to rise over time, and the COVID-19 pandemic reinvigorated the housing market, helping some homeowners increase their equity even more.
  • Making upgrades and improvements can also increase your equity.

But just because you’re house rich doesn’t mean your wallet is full.  Someone who is house rich, cash poor may spend most of their income on homeownership expenses and other monthly expenses like the following: 

  • Mortgage payment
  • Property taxes
  • Insurance
  • Repairs
  • Credit card debt payments
  • Student loans

As a result, there is little income left when it comes to other living expenses. 

If you think this describes you, keep in mind that you have options to unlock your home equity.

Keep reading to better understand this phenomenon and your options. 

What Qualifies as House Poor? 

Are you “house rich, cash poor” or “house poor?” Some would say these terms are interchangeable.

More specifically, being “house poor” means you spend a significant amount of your monthly income on housing expenses.

There’s no hard and fast cutoff number for what qualifies as house poor.

  • Some general guidelines suggest you should spend no more than 25% of your income on home payments. 
  • However, you also have to consider any outstanding debt you may have as well. Together, debt and homeownership expenses should not be more than 36% of your monthly income.

With such straightforward advice like this, how do people end up with high housing expenses? With house prices rising rapidly these days and the unpredictable nature of, well, life, homeowners can easily land in situations that might qualify them as “house poor,” including: 

  • Taking an unexpected pay cut due to a job change or job loss
  • Going from a dual-income family to a single income family
  • Budgeting incorrectly initially and ending up with a home payment that is too large.

Is It Bad To Be House Rich, Cash Poor?

If you find yourself house rich, cash poor, any slight financial hiccup might throw you off budget for a while. Think about that unexpected car repair or that pricey vet bill. Even if you’re able to cover these living expenses with an emergency fund, that doesn’t mean you’ve got the liquid cash on hand for your dream vacation, much less saving for retirement.

But keep in mind that, as a homeowner, you have options that we’ll cover later in this guide. 

How To Avoid Being House Rich Cash Poor

Now that you know the jargon let’s go over some ways you can set yourself up for financial freedom and success. 

Some careful planning goes a long way when it comes to home finances. Before you buy a new home, consider the following: 

  • How much you can afford – Crunch some numbers to figure out what you can afford for a monthly payment. If you’re not a math person, look online for a home affordability calculator to help. 
  • Expect the unexpected – Houses require a lot of upkeep. Unexpected repairs are, well, unexpected. Plan in advance by either setting a lower budget for your home expense or building up savings to cover these things.
  • Opt to make a larger down payment – While this isn’t an option for everyone, it’s a simple solution. The larger the down payment, the less you have to pay off, which could help lower your monthly payments. 

Follow these guidelines before buying a house to give yourself the best chance at avoiding the pitfalls of being house rich, cash poor. 

What If I’m Already House Rich, Cash Poor? 

If you’re already experiencing a lack of cash flow, you might feel like it’s too late to overcome it – it’s not! There are several ways to climb the ladder out of this financial rut. 

  • The “easiest” answer is to find a way to make additional income. But how? Well, you could pick up a side gig to cover your discretionary spending or rent out a room on a room sharing site, but these options aren’t feasible for everyone. 
  • Alternatively, you could learn how to use home equity by taking out a loan (whether a mortgage refinance, a home equity loan, or a HELOC). Keep in mind that all of these options come with some negatives—specifically, you’ll usually add to your overall debt even if you pay less in interest. You may want to fully weigh the pros and cons of home equity loans and HELOCs before you take either route. That said, there are better alternative ways to get equity out of your home.

Selling your house is another option. But what if you don’t want to move? After all, you’ve invested a lot into your primary residence, and who wants the huge all-consuming life disruption of moving? 

Luckily, a sale-leaseback program can provide a solution.

The Homeowner’s Solution 

Being house rich, cash poor is a frustrating position. You have wealth built up in your house—if only there was a way to access it now.

Through a sale-leaseback program, there is. As a home equity loan alternative, a sale-leaseback solution will buy your home and lease it back to you.  Whether you want to pay off debt while staying in your house or need upfront cash to easily move to a new home.

sale-leaseback program can help you avoid (or overcome) the all too common problem of being house rich cash poor. Consult with a financial advisor to learn more.

Key Takeaways

Being house rich and cash poor is a common problem that homeowners face. In some cases, you might not have the spending money you’d like for vacations and luxuries. In others, you could be living paycheck to paycheck or struggling to pay off other debt. If you are still unsure of alternative options to home equity loans, after reading this article, consult a financial advisor to discuss your options.


  1. NerdWallet. How to Budget for a New Home So You Don’t End Up House Poor.
  2. The Balance. Mortgage Questions: Are You House Poor?
  3. Investopedia. House Poor
Cash Poor
House Rich
Tom Burchnell
Written by Tom Burchnell
Director of Product Marketing

This article is published for educational and informational purposes only. This article is not offered as advice and should not be relied on as such. This content is based on research and/or other relevant articles and contains trusted sources, but does not express the concerns of EasyKnock. Our goal at EasyKnock is to provide readers with up-to-date and objective resources on real estate and mortgage-related topics. Our content is written by experienced contributors in the finance and real-estate space and all articles undergo an in-depth review process. EasyKnock is not a debt collector, a collection agency, nor a credit counseling service company.