US homeowners with mortgages held nearly $17.9 trillion in equity in the first quarter of 2026, according to a report released July 23. The average borrower had approximately $310,500 in equity, leaving mortgaged homeowners with substantial housing wealth.
Yet fewer properties meet the equity-rich threshold, and seriously underwater rates have increased. A homeowner’s position now depends heavily on local prices, loan balances, purchase timing, and the cost of moving.
Fewer homes meet the equity-rich threshold
An analysis of mortgaged properties classified 43.3% as equity-rich in the first quarter, meaning their estimated secured debt did not exceed half their estimated value. The share fell from 44.6% in the previous quarter and reached its lowest level since late 2021.
The equity-rich share declined year over year in 44 states. Florida, Arizona, Colorado, North Carolina, and Texas recorded some of the largest decreases.
The seriously underwater share rose to 3.2%, from 3% the previous quarter and 2.8% a year earlier. That category covers properties whose estimated secured debt exceeds their value by at least 25%.
Home prices remain higher nationally than they were a year ago, although appreciation has slowed. FHFA’s June 30 index showed prices slipping 0.1% in April while remaining 2% above April 2025 levels.
Aggregate equity can remain high while fewer properties qualify as equity-rich. Longtime owners with small mortgage balances may hold large cushions, while recent purchasers in slower markets have had less time to reduce their debt or benefit from appreciation.
Why strong equity is not unlocking inventory
High equity is not automatically producing listings. Many owners would have to exchange a low mortgage payment for today’s borrowing costs, even on a similarly priced home.
Homeowners with mortgages who moved in 2024 had a median monthly payment of $2,225, compared with $1,797 for 2021 movers whose homes had a higher median value. The gap was wider between 2024 movers and homeowners who last moved five years earlier. After adjusting for inflation, the newer movers paid $648 more per month — a 41.1% difference and the largest recorded in Census data going back to 2008.
Only 1.5 million homeowners with mortgages moved in 2024, the lowest total since 2014. That marked a third consecutive decline from the 2021 peak of 2.1 million.
Higher payments do not directly reduce equity, but they can make it harder to cover repairs, selling expenses, and the payment on a replacement home. Some owners may instead use HELOCs or home equity loans to preserve their first-mortgage rate rather than sell.
Run the equity and move-up math
An equity review should compare the property’s estimated value with its mortgages and liens, then subtract commissions, closing expenses, and likely repairs. The remaining proceeds show what a seller may have available for the next transaction.
Because pricing and demand are diverging by market, agents should use local sales data rather than national appreciation figures. Move-up sellers also need a side-by-side comparison of their current payment and the projected cost of the replacement property.
Homeowners who moved before mortgage rates increased may be useful prospects for an equity review. Their lower payments may give them more flexibility than recent movers, although financing the next property could offset that advantage.
A strong outreach conversation should cover three figures: estimated equity, likely net proceeds, and the payment on the next home. A large equity balance only creates a move when the seller can afford what comes next.