As the housing market cools with the change from autumn to winter, lenders may find that the final months of 2025 hold new potential. U.S. homeowners now hold nearly $32 trillion in tappable home equity, a significant resource that represents a substantial opportunity for lending growth [1]. Yet, with the vast majority of mortgage holders locked into rates below 5%, they are increasingly looking to tap into their home’s value without refinancing.
This dynamic has ignited the demand for home equity lines of credit (HELOCs) and home equity loans. In fact, the market has seen a resurgence, with originations growing significantly as homeowners seek liquidity. To meet this demand effectively requires a valuation solution that is as agile as the market itself. The strategic adoption of a valuation solution that combines a high-performance Automated Valuation Model (AVM) with a targeted property inspection is proving to be resourceful for lenders aiming for both efficiency and precision.
Smart Solution for a Shifting Market
An AVM offers a reliable baseline for property valuation, using extensive data and advanced modeling to quickly estimate a home’s value. High-performing tools, such as Veros’ VeroVALUE AVM, provide lenders with an instant, objective reference point that helps streamline the application process from the start.
An AVM alone can’t capture a newly remodeled kitchen or identify deferred maintenance. That’s why the “plus inspection” matters. When paired with a flexible inspection service like Valligent’s ValINSPECT, lenders gain the human insight needed to verify condition, validate data, and see the full picture of the property. From in-person to virtual, scheduled to on-demand, inspections give lenders both accuracy and convenience—seamlessly fitting into today’s digital processes.
Strategic Advantages for Lenders
For financial institutions focused on growth and client satisfaction, this paired solution offers a clear competitive edge.
- Accelerated Timelines: In today’s market, borrowers expect speed and simplicity. Nearly half (46%) say an easy online application is a top priority, while delays in approval remain one of the biggest frustrations [2]. By shortening the valuation timeline, lenders can deliver faster approvals, improve the borrower experience, and move loans to closing more quickly.
- Precision and Confidence: Pairing AVM data with an on-the-ground inspection gives you a valuation you can trust. While top AVMs often stay within a 2–4% margin of error in many markets, adding a physical check gives your underwriting team extra confidence in their decisions [3].
- Operational Efficiency: This dual approach reduces admin work and costs associated with traditional valuation methods. Lenders using digital-first appraisal processes have reported closing loans up to 10 days sooner—an efficiency boost that can have a meaningful impact on profitability [4].
- Superior Borrower Experience: Today’s homeowners are digitally savvy and time-conscious. Offering a lending process that is faster, less intrusive, and more cost-effective directly meets their expectations. It builds the kind of loyalty that leads to long-term relationships and future business.
Looking ahead to 2026, the lending landscape will continue to evolve. The institutions that succeed will be those that use innovative tools to better serve their clients. The AVM plus inspection approach isn’t just a new way to value property—it’s a forward-looking strategy for tapping into today’s home equity opportunities. By using proven, compliant solutions like the VeroVALUE AVM paired with ValINSPECT, lenders can move with both speed and confidence. This season, that’s a smart strategy. Reach out to Valligent to learn more about how it can work for your business.
References
- Board of Governors of the Federal Reserve System. (2025). Financial Accounts of the United States – Z.1, Table B.101, Homeowners’ Equity in Real Estate. https://www.federalreserve.gov/releases/z1/current/html/b101h.htm
- ICE Mortgage Technology. (2024). Borrower and Lender Insights Survey. https://www.icemortgagetechnology.com/resources/borrower-and-lender-insights-survey
- Freddie Mac. (2023). Automated Valuation Models (AVMs): A Guide. https://www.freddiemac.com/research/insight/20230927-guide-to-automated-valuation-models
- Fannie Mae. (2024). The Value of a Digital Appraisal Process. https://singlefamily.fanniemae.com/learning-center/appraising-property/value-digital-appraisal-process
