US Homeowner Equity Hits $18 Trillion Milestone

US home equity reached $18 trillion for the first time, with underwater mortgages falling. Texas and Florida show the highest negative equity, though overall equity is strong. Rising interest rates may moderate future gains.

Texas and Florida Face Highest Underwater Mortgages

The August home loan screen record from Intercontinental Exchange (ICE) located that home mortgage owner equity reached $18 trillion for the first time ever before in the second quarter of 2026, and unfavorable equity fell to its most affordable degree in 10 months.

Undersea Mortgages Rise Despite Equity Growth

The greatest rates of underwater home mortgages are concentrated in Texas and Florida, according to the record. Those two states, which experienced a rise in migration and homebuilding in the early 2020s, have subsequently seen home costs drop more substantially compared to much of the country, and they represent 39% of all undersea homes nationwide, the record kept in mind.

However at the exact same time, the number of consumers that are undersea was up 44% year-over-year at the end of June to 813,000, and 320,000 of those house owners were additionally behind on home mortgage payments– virtually double the number reported a year earlier– making it a “fad worth tracking as the marketplace remains to stabilize,” the report stated.

California and Northeast Markets Show Strength

“Mortgage holder equity hitting $18 trillion is an amazing milestone– one that mirrors just how much wealth American house owners have actually constructed,” Andy Walden, head of home mortgage and real estate market research at ICE, claimed in a news release coming with the report.

California, Northeast going solid: Much of the country is still in fairly good condition, nevertheless. Undersea mortgages are especially unusual partially of the Bay Area and Southern California, according to the record, as well as in Northeastern markets consisting of Boston, Divine superintendence and New York– regions that are more likely to be sellers markets.

Sun Belt Markets Most Affected by Negative Equity

“The spring market provided a purposeful increase to both costs and equity, and we’re seeing those tailwinds overcome the information currently,” Walden added. “At the exact same time, rates have trended higher given that early in the year, which might soften how much added acceleration we’re likely to see in the 2nd fifty percent.”

The marketplaces with the highest negative equity in Q2 were Cape Coral Reefs (11.4%) and Lakeland (7.5%) in Florida, followed by San Antonio (6.9%) and Austin (6.6%) in Texas. The only various other states with any markets publishing unfavorable equity above 3% were Colorado and Louisiana.

Sunlight Belt markets most influenced: Nationally, the share of homeowners with adverse equity– indicating their home values are much less than their mortgage balances– is still well listed below pre-pandemic levels, but some parts of the country are not making out.