Two industry voices say brokers who don't offer the product are leaving deals behind
With many homeowners remaining locked into low-rate mortgages, or deterred from making a move by other financial constraints, the home equity in their current homes continues to grow.
American homeowners are sitting on mountains of available home equity. Unwilling to give up a lower-rate mortgage for a cash-out refinance, homeowners are turning to home equity products as the most viable way to access that home equity. New data from LendingTree shows just how much equity is available to access.
LendingTree data, drawn from nearly 1 million home equity inquiries submitted through its platform, shows available home equity reached $34.9 trillion in the first quarter of 2026, with households owning $48.7 trillion in real estate assets and carrying $13.8 trillion in mortgage debt.
Hawaii leads with a median home equity of $425,000 and 80.5% of inquiries reporting at least $200,000 in equity, followed by California at $350,000 and Massachusetts at $345,000. At the bottom of the list, West Virginia and Iowa both report a $130,000 median.
The latest data confirms the thoughts of one industry CEO about the importance of equity products, not just for homeowners but for mortgage brokers watching pipelines slow down.
Joe Steffa (pictured top), CEO and executive chairman of Spring EQ, said most brokers who can originate home equity products have a major advantage.
"The flexibility that it gives the homeowner today is a very, very different proposition than what it probably did years ago," Steffa told Mortgage Professional America. "My biggest asset that I own is my home. Many people's biggest asset in our country is their home. It's the biggest financial decision most people in our country will make in their lives.
“Now if they're able to use that to give them that flexibility to be a little bit more savvy of a borrower, that's why you see the rise of home equity today."
Educating homeowners
Matt Schulz, chief consumer finance analyst at LendingTree, said even states with limited income have a lot of tappable equity.
"Even at the bottom of the list, you're still talking about median home equity of $130,000," Schulz told Mortgage Professional America. "And that's real money for anybody. The places at the bottom — West Virginia, Arkansas, Mississippi, Kentucky — are places where income levels aren't necessarily that high, and maybe even more importantly, their credit may not be that great. So having $130,000 of home equity is a pretty big deal because it gives you options in terms of credit."
Schulz said the elevated rate environment has pushed home equity into an unusual position, making it more necessary and more accessible at the same time.
Because rates have stayed high, homeowners are not selling. Their equity is compounding, and with consumer credit card debt near record levels, more of those homeowners have a specific need that equity can address.
He said the most important job lenders and brokers have in this environment is making sure borrowers understand what they have and how to use it responsibly.
"One of the biggest things that is important for lenders to do is make sure that people understand how home equity works," he said. "Be pretty transparent about the risk and talk to people about handling it wisely. You have $130,000 in equity — that doesn't mean you need to take out a $130,000 loan.
“You want to use it with intention to cover what you need and what you're trying to accomplish. What you don't want people to do is say, 'Holy cow, that's a lot of money' and end up spending themselves into trouble."
An opportunity for brokers
Steffa said one of the most important things brokers can communicate to clients is that accessing equity does not require giving up the low-rate first mortgage they are holding.
"If I take a further step back — you don't have to pay off that first," he said. "Whether you take out a closed-end second mortgage or a HELOC of some sort, you leave that $400,000 mortgage in place and give yourself the flexibility. That's one thing brokers need to know."
Spring EQ originates across three distinct product types, including a traditional closed-end second mortgage, a variable-rate HELOC, and a fixed-rate HELOC the company calls its fixed-line product. Steffa said the fixed-rate version is where the market is moving.
"That product for us is now 31% of what our brokers do," Steffa said. "It's bigger than variable-rate HELOC for us."
He said the product works by giving borrowers the draw flexibility of a traditional line of credit with a fixed payment throughout the draw period, rather than the floating rate most HELOCs carry. The pricing premium over a closed-end second mortgage is just 25 basis points.
"For our traditional closed-end second, let's say it's an 8% rate for a 740 FICO borrower at 65 LTV," he said. "We're at an 8.25% for the fixed-line product. We're only charging 25 basis points for the optionality of being able to draw up and down for our three-year period. As a borrower, I would take that option all day long for 25 bps."
Steffa said the credit quality of today's home equity borrowers bears no resemblance to the subprime era. Spring EQ's average borrower carries a 750 FICO score with a combined loan-to-value of 68%, well below the thresholds where stress historically begins.
Schulz said the window for home equity loans is likely going to be a longer one, as he doesn’t expect a major rate drop in the near future.
"Anybody expecting a big drop in interest rates anytime soon seems like they're going to end up disappointed," he said. "The best thing is to kind of prepare for the worst and hope for the best. Controlling what you can control is almost always the best plan."
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