New data showed contrasting signals for the U.S. housing market, as home equity levels hit record highs, showing sustained strength, while noticeable heightened stress affected certain segments of borrowers, according to ICE Mortgage Technology.
Accrued equity among mortgage holders accelerated to $18 trillion for the first time on record in July, the home lending unit of Intercontinental Exchange reported in its monthly First Look. The upturn came off momentum provided by rising housing prices, which moved up 1.5% on a year-over-year basis, the highest rate of growth in 14 months, the ICE Home Price Index said.
"Mortgage holder equity hitting $18 trillion is a remarkable milestone — one that reflects just how much wealth American homeowners have built," said Andy Walden, head of mortgage and housing market research at ICE.
Of the record $18 trillion in equity, 47.5 million homeowners hold $11.7 trillion they can tap, which comes close to $212,000 per borrower, ICE reported.
The burgeoning accrued amounts available are leading many lenders to increasingly highlight or roll out new home equity lines of credit or related products, as mortgage rates continue to discourage refinances. Last summer, the Mortgage Bankers Association forecasted a 9.5% increase in HELOCs for 2026 and a 4.1% rise in home equity loans.
Moderating interest rates over the winter accounted for early-year housing demand, leading annual appreciation higher for five straight months. The upward movement countered more subdued prices of a year ago.
On a month-to-month basis, home values have increased since last September on a seasonally adjusted basis, with a sharp rise in the first quarter this year, ICE reported.
"The spring market provided a meaningful boost to both prices and equity, and we're seeing those tailwinds work through the data now. At the same time, rates have trended higher since early in the year, which may soften how much additional acceleration we're likely to see in the second half," Walden continued.
Underwater mortgages see 44% surge
Yet despite the noteworthy amount of equity now held by U.S. homeowners, July data also showed a more concerning development for the lending community on the opposite end of the scale.
The number of underwater mortgages, defined as when outstanding balances exceed the value of the collateralized properties, jumped 44% from July 2025. Approximately 813,000 borrowers are currently underwater, with stress appearing in three distinct categories, ICE said.
- On a regional basis, Texas and Florida in particular saw growth in underwater units due to the pronounced decline in home values from peaks earlier this decade.
- Homeowners financing their properties with mortgages backed by the Federal Housing Administration or Department of Veterans Affairs, likewise, are falling underwater at higher levels than conventional borrowers. The trend corresponds to notable rates of delinquencies among FHA loans in early 2026, although more recent data points to improving numbers.
- With accompanying mortgage rates from 2022 to 2025 more than two times higher in most cases compared to vintages of earlier this decade, new liens over the three-year period are seeing a higher share go underwater. Advice to "date the rate" has thus far failed borrowers, as multiple predictions of a pending drop that would open up refinancing opportunities have yet to materialize.
The wide range of rates borrowers have locked in
Elsewhere in its First Look, ICE Mortgage Technology researchers noted the wide variation of mortgage rates among seemingly similar buyers who purchased a home this year. Conforming loan borrowers with nearly identical credit profiles averaged a 38-basis-point spread in their rate locks, while among FHA and VA, the number widened to 47 and 48 basis points, respectively.
For a $300,000 conforming mortgage, the spread represents a difference of approximately $76 in payments each month and $5,790 over five years, ICE said.
