Home Equity Growth Slows, But Fundamentals Remain Strong

Last year, Curinos projected continued growth, if moderate, for the home equity market heading into 2026. While the fundamentals that supported that outlook remain largely intact, evolving economic conditions and changing mortgage market dynamics are likely to soften demand for the remainder of the year.

Curinos now expects home equity originations to grow between 0% and 3% during the first half of the year, followed by 1% to 4% growth in the second half, resulting in 0% to 3% growth for the year. That’s based on our proprietary home equity market intelligence and economic indicators.

The adjustment reflects increasing pressure on consumers from several fronts. Economic uncertainty continues to influence household financial decision-making, while inflation remains a concern for many families and may further increase the likelihood of rate hikes. That’s at odds with the several rate cuts that were anticipated at the start of the year. Along with the relatively sour consumer sentiment, slower growth to homeownership is reducing some of the drivers that have historically supported home equity demand.

But despite these headwinds, the underlying fundamentals remain compelling. Homeowners continue to benefit from sustained home values and significant levels of tappable equity, which continues to hover around $18 trillion. Many consumers are carrying higher levels of revolving debt, creating opportunities for debt consolidation. And most significantly, the vast majority of homeowners remain locked into low-rate first mortgages, which will continue to keep home equity products in lead position for the foreseeable future as mortgage rates remain stubbornly high.

So while the outlook for 2026 may be more cautious than previously anticipated, home equity continues to represent one of the strongest opportunities in consumer lending. For lenders, success will depend on balancing changing consumer behavior with the enduring market dynamics that continue to support long-term growth.