How Homeowners Across Western Washington Are Using Equity to Build Wealth in 2026

With the new year underway, many homeowners across Western Washington are taking a fresh look at their equity and asking a simple question. What’s the smartest way to use it in 2026? After years of steady appreciation in Snohomish, King, Grays Harbor, and Clallam counties, homeowners are sitting on more equity than they realize. The ones who move proactively are turning that equity into long-term stability and generational wealth.

Here are the three paths we’re seeing people take right now.

1. Buying an Investment Property for Cash Flow and Long-Term Appreciation

More homeowners are using a portion of their equity to purchase their first investment property. This is happening everywhere.

Why this works in 2026.
• Rents remain strong across most of Western Washington.
• Inventory is still tight, which supports long-term appreciation.
• A small equity pull can create an income-producing asset without straining monthly cash flow.

This strategy appeals to anyone who wants an additional revenue stream or a more secure retirement plan.

2. Building an ADU to Generate Monthly Income or Support Family Housing Needs

ADUs continue to be a powerful wealth-building tool. Western Washington cities and counties are slowly making them easier to build, and more homeowners are taking advantage of that.

People are using ADUs for:
• Long-term rental income
• Short-term stays in markets where it’s allowed
• Housing for aging parents
• A space for adult children coming home to save money
• A future downsizing option

A well-designed ADU can:
• Lower your monthly payment
• Increase the value of the property
• Provide flexible living arrangements for years to come

This is especially attractive in Snohomish County, North King County, and parts of the Olympic Peninsula where space and zoning allow for creative solutions.

3. Using a HELOC Strategically Rather Than Emotionally

HELOCs are seeing a surge in interest again, but the smartest homeowners are using them with intention. The goal isn’t to rack up consumer debt. The goal is to leverage low-cost access to capital for something that strengthens financial position.

Top uses in 2026 include:
• Consolidating high-interest debt
• Funding home improvements that raise property value
• Covering the gap when buying a new home before selling the current one
• Financing an investment purchase
• Building an ADU/DADU or studio space
• Setting aside a safety buffer for cash management

A HELOC gives homeowners flexibility and optionality without forcing immediate repayment on a tight timeline.

The Bigger Picture

Equity is only valuable when it’s understood and used intentionally. Homeowners across Western Washington are no longer sitting on equity for the sake of it. They’re putting it to work in ways that:
• Build long-term wealth
• Increase property value
• Support lifestyle goals
• Create more financial stability
• Provide opportunities for the next generation

The right strategy depends on your goals, timing, and financial picture. What matters most is having a plan instead of leaving your equity untouched and underutilized.