Homeowners with a mortgage held a record $17.9 trillion in net home equity in the first quarter of 2026, according to Cotality’s Homeowner Equity Insights Report released July 23, up $206.6 billion, or 1.2%, from the fourth quarter of 2025.
The average mortgaged borrower now holds $310,500 in equity, based on data covering 56.7 million properties with a mortgage. Cotality estimates total homeowner equity across all properties, including those owned outright with no mortgage, at roughly $34 trillion.
“American homeowners with a mortgage now hold nearly $17.9 trillion in home equity, about five times more than 15 years ago,” said Selma Hepp, chief economist at Cotality, pointing to more than a decade of sustained price appreciation since the aftermath of the 2008 financial crisis, when millions of borrowers were underwater on their mortgages.
Equity is not distributed evenly across the country. Hawaii had the highest average per-borrower equity, at $688,000, followed by California at $626,900, Massachusetts at $479,600, Washington at $441,000, and New York at $433,000, all high-cost coastal markets where home values have climbed furthest over the past decade. At the other end, Louisiana borrowers averaged just $114,700 in equity, followed by Oklahoma at $123,900 and Iowa at $124,300, reflecting both lower home prices and, in Louisiana’s case, a weaker price-appreciation trend.
Negative equity, in which a borrower owes more on a mortgage than the home is worth, continued to decline. About 1.9% of mortgaged properties, or roughly 1.09 million homes, were underwater in the first quarter, a 9% year-over-year drop equal to 106,000 fewer underwater properties than a year earlier. Cotality’s sensitivity analysis found that even a 5% nationwide price decline would push only about 188,000 additional properties into negative equity, a sign that most homeowners now carry enough of a cushion to withstand a moderate downturn without going underwater.
Homeowners are increasingly tapping that cushion. Home equity line of credit and home equity loan originations totaled $77.1 billion in the first quarter, up 10% from $69.7 billion in the same period a year earlier. That increase comes even as overall home-sale transaction volume has stayed subdued, suggesting more owners are choosing to borrow against their homes rather than sell them, whether to fund renovations, pay down higher-cost debt, or cover other expenses.
The equity figures are calculated from Cotality’s automated valuation models applied to its property database, comparing outstanding mortgage balances against estimated current market values across the 56.7 million U.S. properties that carry a mortgage. Roughly half of the nation’s owner-occupied homes have no mortgage at all and are excluded from the $17.9 trillion figure, which is one reason Cotality’s broader all-property estimate, at roughly $34 trillion, nearly doubles the mortgaged-only total.
The state-level gap illustrates how uneven the run-up in home values has been. A borrower in Hawaii holds, on average, roughly six times the equity of a borrower in Louisiana, a gap driven by the wide difference in home prices between the two states rather than by loan size or down-payment behavior alone. Cotality’s report frames that dispersion as a structural feature of the current housing cycle rather than a temporary anomaly, since the states at the top of the list have consistently ranked among the highest-cost markets for more than a decade.
What it means
Verified facts: mortgaged-homeowner equity hit a new nominal high in the first quarter, equity is heavily concentrated in high-cost coastal states, negative equity keeps shrinking, and home-equity borrowing is rising faster than the broader housing market.
Cotality’s interpretation: Hepp’s framing casts the current equity level as part of a long recovery arc from the 2008 crash rather than a sign of a fresh boom, and the firm’s sensitivity modeling suggests the equity cushion is broad enough to absorb a modest price pullback without a wave of new underwater borrowers.
RealtyWire analysis: the combination of near-record equity and rising HELOC borrowing, even as mortgage rates sit at their highest level of 2026, points to homeowners increasingly using their homes as a financing tool rather than trading up, a pattern consistent with the broader lock-in effect keeping existing owners from listing and moving.
What to watch
Cotality’s next equity report, covering the second quarter, will show whether the pace of equity growth holds up as home-price appreciation cools in several major metros. Also worth watching: whether rising HELOC volume shows up in delinquency data down the line, particularly in lower-equity states such as Louisiana and Oklahoma, where borrowers have a thinner cushion if local home values soften. That equity thinness is a different risk profile than the mortgage-default trends captured in ICE Mortgage Technology’s recent FHA default data, which tracks a separate, government-backed segment of the market.
