For millions of American families, the home they already own remains a vital source of financial security. According to ICE Mortgage Technology’s August 2026 Mortgage Monitor, mortgage holders nationwide held a record $18 trillion in home equity in the second quarter of 2026. ICE classifies $11.7 trillion of that amount as “tappable” equity, belonging to 47.5 million borrowers.
Equity‑rich homes vary widely by state
Griffin Funding examined ATTOM’s Q2 2026 Home Equity & Underwater Report to see where the equity cushion is deepest. ATTOM defines a mortgaged property as equity‑rich when the combined loan balance does not exceed half of the home’s estimated market value. Nationally, 41.1 % of mortgaged residential properties met that standard.
Vermont leads the nation, with 78.9 % of mortgaged homes classified as equity‑rich. Montana follows at 59.0 %, Rhode Island at 54.9 %, South Dakota at 53.6 % and New Hampshire at 53.1 %. The Northeast dominates the top‑ten list, and Vermont’s rate sits nearly 38 percentage points above the national average.
At the opposite end, Louisiana records the lowest equity‑rich share at 17.5 %. Minnesota (20.1 %), Maryland (28.0 %), Alaska (30.4 %) and Iowa (32.2 %) round out the bottom five.
Trend: fewer homes meet the equity‑rich threshold
While the total dollar amount of equity is at an all‑time high, ATTOM reports that the share of equity‑rich homes fell from 47.4 % in Q2 2025 to 41.1 % a year later. After four consecutive quarterly declines, the rate now sits near a five‑year low. Only four states—North Dakota, South Dakota, Kentucky and Wyoming—posted year‑over‑year increases.
Minnesota experienced the sharpest drop, falling from 37.6 % to 20.1 %. It also recorded the highest seriously underwater rate at 12.1 %, up from 2.6 % a year earlier. Minneapolis had the highest seriously underwater rate among large metros, second only to Baton Rouge.
Across the nation, 104 of the 108 metros ATTOM analyzed showed lower equity‑rich shares than a year earlier. The share of mortgaged properties considered seriously underwater (loan balances at least 25 % above market value) rose to 3.2 % from 2.7 %.
What the numbers mean for homeowners
Home equity is not cash; accessing it usually requires either selling the property or borrowing against it. Many homeowners with substantial equity still carry first mortgages that were locked in when rates were lower. A cash‑out refinance replaces the existing loan with a larger one, which can be costly for those who already enjoy a favorable rate.
Because of that, second‑lien products such as home equity lines of credit (HELOCs) and home equity loans have seen renewed interest. ICE’s June 2026 Mortgage Monitor notes that 54 % of all home‑equity extraction in Q1 2026 came through second liens, the strongest first‑quarter volume in 18 years. TransUnion’s Q2 2026 Credit Industry Insights Report shows a 5.8 % year‑over‑year rise in home‑equity originations, driven by a 16.8 % jump in HELOC originations.
Borrowing against home equity adds debt and creates an additional payment, but for qualified homeowners it can provide flexibility for renovations, debt consolidation, or other planned expenses. Self‑employed borrowers often rely on bank‑statement loans that evaluate income based on deposits rather than traditional pay stubs.
Looking ahead
The record $18 trillion figure underscores the strength of American household wealth, yet the declining share of equity‑rich homes signals that many recent buyers—particularly those who purchased between 2022 and 2025—have little equity to draw on. As mortgage rates remain elevated, homeowners will continue to weigh the trade‑offs of tapping equity versus preserving low‑rate first mortgages.
For families across the country, the equity cushion remains a vital safety net, even if it is unevenly distributed. Homeowners in states like Vermont enjoy deep equity reserves, while those in Louisiana and other low‑equity states may find fewer options for borrowing against their homes.
Original reporting: KRDO (Colorado Springs metro) — read the source article.
