Home Equity Is at a Record High, But Growth Is Slowing

Mortgage originations have reached their highest quarterly volume since 2022, according to mortgage data provider ICE Mortgage Technology’s latest Mortgage Monitor Report for August. However, most of these originations are driven by refinance activity rather than home purchases.

Total home equity and tappable equity—the amount homeowners can borrow against while keeping at least 20% equity—also reached all-time highs, causing many homeowners to opt for cash-out refinances.

Of borroweres who elected for a cash-out refinance, 70% accepted higher mortgage rates in exchange for "tapping" an average of $94,000 in home equity. Overall, borrowers entered Q-3 2025 with a combined $17.8 trillion in total home equity and $11.6 trillion in tappable equity.

While equity levels remain high, the pace of home equity growth has slowed to its lowest rate in two years. This deceleration is largely attributable to declining home prices in key Sunbelt and Western markets. Cities like Austin (-38%) and Deltona, Fla. (-37%) have seen tappable equity per borrower fall by more than 25% from recent peaks. Nearly one-quarter of U.S. markets have experienced at least a 5% drop in tappable equity. Additionally, about 1% of mortgage holders – roughly 564,000 borrowers – now owe more than their homes are worth.