EasyKnock’s model aims to help struggling homeowners tap into $32 trillion in home equity.
The U.S. housing market faces a severe affordability crisis. Home prices have risen 60% over the past decade, outpacing inflation and wage growth. Millions of Americans struggle with housing costs. The National Association of Home Builders reports that 66.6 million households can’t afford a $250,000 home, and this issue is no longer limited to expensive coastal cities. It’s spread to smaller metropolises and rural areas.
In the face of this crisis, a New York-based startup is offering homeowners an unconventional solution: Sell your house and rent it back. EasyKnock, founded in 2016, has introduced a residential sale-leaseback program that allows homeowners to convert their home equity without moving out or taking on additional debt.
Sell and Stay
EasyKnock calls its model “Sell & Stay.” Homeowners can sell their property at fair market value, receiving up to 75% of the home’s worth in cash with the remainder in the form of an option; that option enables the customer to control the timing of a subsequent sale and even to realize all future appreciation should they ultimately direct EasyKnock to sell the house on the open market. They then become tenants, renting the property back for up to five years.
During this period, former homeowners have options. They can buy back the home at a predetermined price. Alternatively, they can sell the home on the open market, potentially benefiting from any appreciation in value.
“I believe that money is fungible,” says Jarred Kessler, CEO of EasyKnock, explaining the company’s rationale. “You often hear about how your home is not an ATM, but if your home is an asset and you can convert it into cash, and you’re struggling, and you can pay off credit card debt that’s at a higher rate, then you should be able to release that cash out of the home through a principal transaction. Why shouldn’t there be choices for people in that situation?”
This model is designed to address a fundamental mismatch in the current housing market. Federal Reserve data shows that American homeowners collectively hold nearly $32 trillion in home equity — an average of $300,000 per mortgaged home. Yet many of these same homeowners are struggling with other forms of debt. Credit card balances hit a record $1.13 trillion by the end of 2023.
Traditional methods of tapping into home equity, such as refinancing or home equity loans, have become increasingly difficult to access in this macroeconomic environment. High interest rates and stringent lending standards have put these options out of reach for many. At the same time, selling and moving to a less-expensive home is often not viable in a market where prices are rising across the board.
Owning a home has historically been seen as key to financial stability and wealth-building, but high prices and economic uncertainty have exacerbated the costs of home ownership. EasyKnock’s model prioritizes access to capital over building equity through mortgage payments. It set a rent increase cap of 2.5% per year or the consumer price index, whichever is greater. This is lower than the 5% cap proposed by U.S. President Joe Biden for corporate landlords.
“We can’t control inflation, but we’re committed to not increasing it, the greater CPI or 2.5%,” says Kessler.
The goal is to decouple the benefits of homeownership, such as stability and property appreciation, from related burdens, such as illiquidity, maintenance costs, and market risk.
EasyKnock also offers another sale-leaseback program, MoveAbility, which operates similarly to Sell & Stay but with a 12-month term, designed for those actively in the market and needing cash or time for their next home.
EasyKnock’s Growth Trajectory
EasyKnock has expanded its reach since its founding in 2016. In July 2023, it acquired Ribbon, a company that helps prospective home buyers make cash offers in competitive markets. This was followed by the purchase of Balance Homes in December 2023, which introduced a co-ownership model as an alternative to traditional mortgages. Most recently, in May 2024, it added HomePace to its portfolio, allowing homeowners to sell a portion of their future home appreciation in exchange for upfront cash.
As EasyKnock expands its reach — the company secured $28 million in funding in Q1 2024 — it faces the challenge of scaling its solutions in a market that varies wildly from region to region. The housing affordability crisis, while national in scope, manifests differently across the country. In some areas, the problem is a shortage of supply; in others, it’s a mismatch between local wages and home prices.
But the company’s growth suggests that there’s significant demand for alternatives to traditional homeownership models. As of 2024, the company has completed transactions nationwide.
The Human Impact
EasyKnock primarily focuses on homeowners who have built up equity in their homes, but are struggling with other financial pressures.
The company works exclusively with single-family homes, requiring that homeowners have built up sufficient equity to make the sale-leaseback model viable.
Kessler emphasizes that EasyKnock aims to serve those who often have the fewest options.
“I think a lot of people are trying to serve the upper echelon and I think the people that need the most help are the middle class,” he says. “That sector can come under a lot of scrutiny, but I think if it’s done the right way, it’s probably the biggest need in the market today.”
While the financial mechanics of EasyKnock’s model are important, Kessler stresses that the company’s true measure of success is the impact on people’s lives.
“We’ve provided relief to a lot of homeowners. We’ve changed people’s lives and when they felt like there was no one that cared about them, we cared about them.”
He went on to share an example. “There was a woman, a veteran, who was struggling a little bit and she wanted to stay in her home. But her credit card debt was very high. She came to EasyKnock. We bought her home, rented it back to her and within two years she got all her personal finances sorted out and she paid off all her debt and she bought back her home.”
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