The $11 Trillion Sitting in America's Homes: Smart Ways to Use Your Equity in 2026

American homeowners are sitting on a staggering amount of untapped wealth — roughly $11 trillion in tappable home equity, according to ICE Mortgage Monitor data from earlier this year. And in 2026, more of them are finally putting it to work: ICE's June report shows homeowners tapped their equity in the first quarter at the highest level in five years.

If you bought a home in Arizona anytime before the pandemic — or even during it — there's a good chance you're part of that story. Here's how to think about it.

Why equity borrowing is surging now

Two forces are colliding. First, most homeowners with a mortgage are locked into rates far below today's market — many below 4%. Selling or doing a cash-out refinance would mean giving up that rate. Second, HELOC and home equity loan rates have drifted down to some of their most affordable levels in years, with average HELOC rates hovering in the low 7% range, near 2026 lows.

The result: a "stay and improve" economy. Rather than trading up, homeowners are keeping their cheap first mortgage and adding a second-lien product to access cash. Renovation spending is projected to top $500 billion in 2026.

The wealth-building lens: good debt vs. expensive debt

Home equity is the engine of most American household wealth — homeowners' equity stakes have grown dramatically since 2020, and real estate remains the largest asset on the typical family balance sheet. But using equity well is what separates wealth-building from wealth-draining. The general framework:

Uses that tend to build wealth:

• Renovations that add value or extend how long the home works for your family
• Consolidating high-interest debt (credit cards at 22%+ into a HELOC near 7%) — if you fix the spending that created the balance
• Funding a down payment on an investment property that cash-flows
• Eliminating PMI or restructuring overall debt to improve monthly cash flow

Uses to approach with caution:

• Vacations, vehicles, and lifestyle spending — depreciating or vanishing uses secured by your house
• Speculative investments where a loss still leaves you with the payment

A HELOC is flexible (draw what you need, pay interest only on what you use) while a fixed-rate home equity loan offers payment certainty. The right tool depends on whether you need a lump sum or ongoing access.

An interesting generational footnote

Recent TD Bank research found younger homeowners are far more likely to treat their home as a financial tool — a large share of Gen Z owners hold or plan to apply for a HELOC — while Boomers, who hold roughly half of all U.S. home equity, mostly leave it untouched. Neither approach is automatically right. The takeaway is simply that your equity is a resource with options, and knowing your number is step one.

What about East Valley homeowners specifically?

Phoenix-area home values surged through the early 2020s and have since stabilized, which means many Mesa, Scottsdale, and Apache Junction homeowners are equity-rich even after the recent cooling. With the market balanced rather than booming, the appreciation autopilot has slowed — making strategic use of existing equity a bigger lever than simply waiting for values to climb.

Step one in any equity decision is knowing your number. Get a free home value report at jasonhallaz.com/evaluation — it takes about a minute, and it'll tell you what you're really working with.

CTA Button: "What's My Home Worth? — Free Report" → https://jasonhallaz.com/evaluation