ATLANTA — U.S. homeowners’ mortgage equity reached a record $18 trillion in the second quarter as home price growth accelerated, even as mortgage delinquencies and foreclosure activity continued to increase, according to Intercontinental Exchange.
ICE’s August Mortgage Monitor found annual home price growth accelerated to 1.5% in July, marking the fifth consecutive month of improvement and a 14-month high. The monthly increase was also the strongest in more than three years.
ICE said lower mortgage rates earlier in 2026 helped stimulate housing demand and support prices, although rates have since risen and could restrain further price acceleration during the second half of the year.
“Mortgage holder equity hitting $18 trillion is a remarkable milestone — one that reflects just how much wealth American homeowners have built,” said Andy Walden, ICE’s head of mortgage and housing market research.
‘Meaningful Boost’
“The spring market provided a meaningful boost to both prices and equity, and we’re seeing those tailwinds work through the data now,” Walden said. “At the same time, rates have trended higher since early in the year, which may soften how much additional acceleration we’re likely to see in the second half.”
Additional Findings
Among other findings from ICE:
- Mortgage holders had $11.7 trillion in tappable equity during the second quarter, with about 47.5 million borrowers holding an average of $212,000 each.
- Total mortgage debt exceeded $15 trillion for the first time, although debt remains well below historical levels relative to home values.
- About 813,000 mortgage holders were underwater, meaning they owed more than their homes were worth. That was up 44% from a year earlier.
- About 320,000 borrowers were both underwater and delinquent entering the third quarter, nearly twice the number a year earlier.
- Texas and Florida accounted for 39% of underwater homes nationwide.
Delinquencies, Foreclosures Rise
The national mortgage delinquency rate increased 5 basis points in June to 3.55%, about half the typical seasonal increase, ICE reported. The rate remained below the 4.16% recorded in June 2019.
The share of mortgages in active foreclosure increased to 0.53%, the highest in six years but still below the pre-pandemic level of 0.57%.
Foreclosure starts reached 43,200 in June, also a six-year high. Foreclosure sales totaled 7,300, up 16% from a year earlier but 46% below 2019 levels.
Loans originated in 2022 or later accounted for nearly 35% of active foreclosure inventory. ICE said borrowers who purchased homes during the higher-interest-rate environment and subsequently experienced limited home price appreciation are accounting for an increasing share of distressed loans.
No Acceleration in Defaults
Despite the rise in foreclosure activity, ICE said there has not been a broad acceleration in new defaults. Its findings show:
- The number of borrowers entering default declined 4% from a year earlier in June and was down 2% for the second quarter.
- New Federal Housing Administration loan defaults fell 15% year over year in June, aided by a 24% decline in FHA re-defaults. New Department of Veterans Affairs loan defaults, however, increased 25% during the second quarter.
- Serious delinquencies remained concentrated among government-backed mortgages. The share of FHA loans at least 90 days delinquent or in active foreclosure reached 5.7% in June, up 1.8 percentage points from a year earlier. The comparable rate for VA mortgages was 2.3%, up 0.4 percentage points.
Significant Differences in Rates Found
While mortgage rates moved higher in July, ICE said it also found significant differences in the mortgage rates offered to borrowers with similar credit profiles.
Among conforming purchase borrowers, rates varied by about 38 basis points across the middle 50% of borrowers and 82 basis points between the 10th and 90th percentiles.
For a $300,000 mortgage, those differences translate into monthly payment variations of approximately $76 and $162, respectively.
