US homeowners are leaning more heavily on their housing wealth, with home equity withdrawals climbing to their highest first-quarter level in five years as elevated mortgage rates continue to reshape borrowing behavior.
According to ICE’s latest Mortgage Monitor report, equity extraction increased 2% from a year earlier during the first quarter of 2026, reaching the strongest first-quarter pace since 2021. The trend reflects homeowners’ growing preference for tapping accumulated equity while preserving the low-rate first mortgages secured during the pandemic-era refinancing boom.
"Equity withdrawals rose 2% year over year in Q1, reaching their highest first-quarter level since 2021. More than half (54%) of all equity extraction came through second liens as borrowers continued to preserve historically low first-mortgage rates. Cash-out refinance withdrawals reached their highest first-quarter level since 2022, while second-lien withdrawals posted their strongest first-quarter performance in nearly two decades."
The figures suggest many households are opting for home equity loans and home equity lines of credit rather than refinancing their primary mortgages at today’s significantly higher rates.
The increase in equity withdrawals comes against a backdrop of weaker overall mortgage activity. Data released by the Mortgage Bankers Association on June 3 showed mortgage applications fell 2.5% for the week ended May 29, extending a period of subdued demand across the housing finance market.
Meanwhile, broader lending activity continued to slow during the opening months of the year. ATTOM’s first-quarter mortgage origination report found that total residential mortgage originations dropped 13% from the previous quarter to 1.57 million loans as affordability pressures weighed on borrowers.
Purchase lending was particularly weak. ATTOM reported that home-purchase loan originations fell 19% from the fourth quarter to 581,261 loans, marking the lowest quarterly level since 2014. Elevated home prices and higher borrowing costs continued to sideline many prospective buyers despite persistent demand for housing.
The diverging trends highlight a housing market increasingly defined by existing homeowners rather than new entrants. While prospective buyers face affordability challenges and reduced purchasing power, homeowners who accumulated substantial equity gains over recent years are finding ways to access cash without giving up favorable mortgage rates.
That dynamic has helped sustain demand for second-lien products even as traditional refinancing activity remains constrained. For lenders, the growing appetite for equity-based borrowing represents one of the few bright spots in an otherwise subdued mortgage environment.
The broader housing landscape remains uneven. Alongside slowing originations, ATTOM recently identified a number of metropolitan areas facing elevated housing-market risk, reflecting ongoing concerns around affordability, economic uncertainty and shifting borrower demand.
For now, however, homeowners appear increasingly willing to tap their properties as a source of liquidity, underscoring the value of accumulated home equity at a time when other forms of borrowing remain comparatively expensive.
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