SELL YOUR HOME

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Historically, the biggest advantage of having home equity was amassing more money to put into a future home.

"That's historically how people have been able to move up in the housing ladder," she said.

But homeowners carrying a low fixed-rate mortgage may feel locked into their current home due to the relatively high rates that would accompany a new loan for a new house.

Moving and downsizing remains an option but "that math doesn't really work in their favor," Baker said.

"Not only has their home gone up in value, but so has everything else in the general vicinity," he added. "If you're trying to find something new, you can't do a whole lot with it."

Cash-out refinance

A cash-out refinance is another option, though should be considered more of a last resort, Elliott said.

"I don't know anyone right now who's recommending a cash-out refi," she said.

A cash-out refi replaces your existing mortgage with a new, larger one. The borrower would pocket the difference as a lump sum.

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To give a simple example: let's say a borrower has a home worth $500,000 and an outstanding $300,000 mortgage. They might refinance for a $400,000 mortgage and receive the $100,000 difference as cash.

Of course, they'd likely be refinancing at a higher interest rate, meaning their monthly payments would likely be much higher than their existing mortgage, Elliott said.

"Really crunch the numbers," Baker said of homeowners' options. "Because you're encumbering the roof over your head. And that can be a precarious situation