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A retiree is reading on a money hammock long chair, with her house toys.
Ben Mounsey-Wood for Money

Patti and Mike M. knew the housing market was hot. So in July, they sold their 5,000-square-foot Chicago-area home for a tidy profit and headed south, leaving snowy winters and an annual $24,000 property tax bill behind.

Ultimately, the pair — both in their late 50s — settled on a smaller home in South Carolina. The move shaved around $3,000 off their monthly housing costs and would allow Mike to retire early — or even now — if he wanted to.

“We sold at a great time,” says Patti, who requested their last name be withheld due to privacy reasons. “We probably got more for the house than we ever would.”

She’s likely right. Home prices have been on a tear lately, rising 18% in just the last year. It has homeowners sitting on unprecedented amounts of equity — about $8.1 trillion of it, in fact. According to Black Knight, the average homeowner gained 11% in tappable equity during just the first quarter of this year.

Though homeowners of all ages can leverage this equity and sell for big profits, it’s baby boomers like Patti and Mike who are uniquely poised for gains. These homeowners have often lived in their homes for decades and, in many cases, paid off their mortgages completely.

"Every single friend of mine, all of their parents are calling me, asking ‘Dana, what should we do?’” says Dana Bull, a real estate agent with Sagan Harborside Sotheby’s International Realty in Marblehead, Massachusetts. “They know they've got a unique opportunity where their properties have appreciated so much to a point that they never even thought possible in their lifetime.”

Are you a baby boomer wondering how to best use your rising home equity? Here are your options.