Mortgage holder equity just crossed $18 trillion for the first time on record. That milestone is sharing space in ICE’s August Mortgage Monitor with a less triumphant number: 813,000 borrowers are underwater on their mortgages, up 44 percent year-over-year.
Both numbers came out of the same report, tracking the same market, in the same month. That split is becoming the defining feature of the 2026 housing recovery: broad-based wealth gains sitting on top of pockets of real distress that are getting worse, not better.
ICE’s report, released Monday, tracks loan-level residential mortgage data and its Home Price Index, which the company says covers 95 percent of U.S. residential properties down to the ZIP code level. The August edition pulls from Q2 equity data and June-July pricing and rate data.
Equity is up. So is negative equity
Of the 47.5 million mortgage holders with tappable equity, the average balance is now roughly $212,000, contributing to the $18 trillion total. Total tappable equity across those borrowers stands at $11.7 trillion.
But the underwater cohort — those 813,000 borrowers — is concentrated in FHA and VA loans, among people who bought between 2022 and 2025. The underwater borrowers are also concentrated in Texas and Florida specifically, where prices have pulled back further from their peaks than almost anywhere else in the country.
Andy Walden, head of mortgage and housing market research at ICE, framed the equity number as a genuine milestone while flagging why it may not extend much further this year.
Andy Walden
“Mortgage holder equity hitting $18 trillion is a remarkable milestone — one that reflects just how much wealth American homeowners have built,” said Walden. “The spring market provided a meaningful boost to both prices and equity, and we’re seeing those tailwinds work through the data now. 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.”
July’s price growth hit a 14-month high
Annual home price growth climbed to 1.5 percent in July, the fifth straight month of acceleration and the steepest single-month jump since mid-2023, according to ICE. The report attributes the increase to lower rates earlier in 2026 pulling demand forward, combined with weak summer 2025 comps rolling out of the year-over-year window.
However, ICE’s own one-month, seasonally adjusted price gains have already softened as rates moved back up over the summer. The report says that caps how much further the annual number is likely to climb before year-end.
2 borrowers, same credit score, different rate
Among conforming purchase borrowers, ICE found a 38-basis-point spread in locked rates between similarly qualified applicants in 2026. On a $300,000 loan, that gap works out to about $76 a month, or roughly $5,790 over the first five years.
The spread widens for buyers using government-backed programs — 47 basis points for FHA borrowers and 48 for VA. ICE says it’s most pronounced among borrowers with lower credit scores, smaller loan balances, higher loan-to-value ratios and government-backed loans generally.
Bank-owned REO properties sold at a 27.5 percent discount to comparable sales in June, among the widest gaps ICE has recorded in more than 20 years of tracking. The steepest discounts, relative to each market’s own history, are showing up in Florida, Texas, California and the Mountain West.
Those are also markets where foreclosure activity and distressed inventory remain scarce, which limits how much buyers can actually act on the discount. It’s a real opportunity with very little supply attached to it.
What this means for agents and lenders
Prices, equity, rates and distressed sales are all trending in directions that read as positive in aggregate. But the underlying data shows the gains and the pain landing on different borrowers depending on loan type, purchase vintage and geography.
For real estate agents working Texas and Florida markets in particular, the underwater-borrower data is worth watching closely. It’s a leading indicator for where short sales, price cuts and inventory pressure could show up next, even as the national equity story stays strong.
