Homeowners Sit on Record Equity — Why Most Still Can't Afford to Move Up in 2026

U.S. mortgage holders held a record $18 trillion in home equity in Q2 2026, with $11.7 trillion tappable equity. Despite this wealth, many cannot afford to move up due to higher replacement mortgage rates near 7%, increased taxes, and insurance costs, which raise monthly payments significantly. This "equity paradox" means owners often stay put, renovate, rent out, downsize geographically, or use bridge financing instead of trading up.