Americans Tapped $47 Billion in Home Equity So Far This Year—and That’s a Slippery Slope To Be On

Homeowners tapped an estimated $47 billion in equity during the first three months of 2026, according to a new report from Intercontinental Exchange.

The June 2026 ICE Mortgage Monitor notes that this is the highest first-quarter withdrawal figure since 2021.

Additionally, an estimated 3.9 million homeowners who took out a mortgage between 2020 and 2022 now also carry a second lien.

The full picture? The "lock-in effect" holding the housing market at bay is alive and well, with homeowners—particularly those with low mortgage rates—keen to stay put. 

While tapping your equity is a perfectly viable way to establish a cash flow, homeowners should be wary about the consequences of doing so. 

The 'lock-in effect' in 2026

According to the ICE report, about 248,000 borrowers tapped home equity through second-lien loans and lines of credit during the quarter, withdrawing roughly $25 billion. The rest opted for cash-out refinances.

This growth hasn’t been seen in five years, but given the economy and the cost of housing expenses, it makes sense.

“In 2021, people were probably tapping into their home equity because they suddenly felt they had so much of it,” explains Jake Krimmel, senior economist at Realtor.com®.

“House prices were appreciating quickly, mortgage rates were extremely low, people were refinancing into lower monthly payments while seeing their home equity rise. So there was real wealth and consumer purchasing power to chase.”

Fast-forward to today, and rather than selling their properties, homeowners seem more content to stay put than ever before. It’s been discussed at length that America’s housing shortage—currently estimated at 4.03 million units—is also a major problem. 

But while boomers get a lot of media attention, it’s actually new homeowners who are tapping into their equity these days. 

“The housing market continues to be defined by the lock-in effect,” says Andy Walden, head of mortgage and housing market research at ICE. 

“Millions of homeowners are sitting on first mortgages with rates well below current market levels, making second liens and HELOCs an attractive way to access equity without giving up those loans.”

“Today, they're probably tapping into it for a few different reasons,” adds Krimmel. 

“One set of borrowers might be looking at today's high mortgage rates and deciding they're still likely to stay in their home for another several years. Another set of very recent homeowners may be opting for cash-out refinancing as mortgage rates dipped briefly below 6% in late February.”

HELOCs and home equity loans accounted for 54% of withdrawals in the quarter, the report shows, with nearly two-thirds of those second-lien borrowers having mortgages that originated between 2020 and 2022, when average rates were in the 3% to 4% range.

Seeing that mid-6% mortgage rates are the new normal, it’s understandable that owners are reluctant to part with their good rates. 

It certainly showed its effect on the spring selling season. 

After a strong start, the most recent analysis from the National Association of Realtors® shows that existing-home sales are down 1% compared with a year ago, when they matched the historic lows of 2024.

“Inventory remains a major constraint on the market,” NAR Chief Economist Lawrence Yun said in a recent press release. 

“Because inventory remains limited, the median home price rose to a new record high for the month of March. That price growth has helped the typical homeowner accumulate $128,100 in housing wealth over the past six years."

“The lock-in effect will unwind really slowly, probably at an imperceptible pace, and definitely not all at once,” adds Krimmel. 

“Homeowner mobility froze up almost at once, but the thaw will take a lot of time.”

An $11 trillion problem

There's an estimated $11 trillion in home equity available to borrowers, according to ICE, and given the state of the economy, it’s tempting for homeowners to tap into that cash to pay the bills.  

“As the price of everything else has increased, those 'locked-in' homeowners are able to take advantage of the fact that their mortgage payments are constant—and falling in real terms,” says Krimmel.

But experts agree that using equity for expenses like vacations, shopping, or even groceries is not the best use of the funds. 

That’s not to say that you shouldn’t use equity. Just make sure you’re in a financial position to pay it back. 

Remember that tapping into your equity isn’t like taking money out of a savings account and that credit card debt is unsecured—if you default, it hurts your credit. But home equity is secured by your house. If you can't pay, you could lose your home to foreclosure.

To that same end, many people opt for HELOCs because they offer flexibility, but they typically come with variable interest rates. The average interest rate for a $30,000 HELOC is 7.43% as of June 3, according to Bankrate.

At that rate, a homeowner could borrow $50,000 of their home equity for a monthly payment of about $275.

Now, if the Federal Reserve raises rates or keeps them elevated to fight inflation, the monthly payment on that equity line could skyrocket unexpectedly. So, while you'll have cash in hand, you may end up in more debt than you started with.

A good rule of thumb is that any time you take money out of the house, you should put it back into the house. 

Remodels, repairs, and general maintenance are all great ways to use your equity, as they can translate into capital improvements and have positive effects, like raising your home value and lowering your home insurance payments.