Tappable equity – the amount of equity that can be withdrawn while leaving a 20% equity cushion – stood at about $11.2 trillion nationwide as of the start of the fourth quarter, according to ICE Mortgage Technology’s latest Mortgage Monitor report.
The mortgage software firm reports that mortgage holder equity levels are stabilizing due to slower home price growth, but improved borrowing costs could benefit equity holders and lenders in the coming quarters.
As of the fourth quarter, mortgage holders had a total of $17.3 trillion in home equity, ICE reports.
Tappable equity is down seasonally from a $11.7 trillion at the peak this summer and flat year over year, marking the slowest growth in over two years.
The average mortgage holder has $204,000 in available equity, the firm estimates.
Total first and second lien debt reached a record $14.7 trillion in the third quarter, representing 46% of home values ‒ slightly above recent years but still low historically ‒ leaving 54% as mortgage holder equity.
The firm notes that while equity growth has leveled off, the cost of accessing equity is improving, and could drop further if the Fed implements additional rate cuts.
Photo: Patrick Pahlke