Americans Have Over $34T In Wealth Trapped In Home Equity — And Wall Street Is Trying To Get Its Hands On As Much Of It As Possible

Home equity has been one of the largest sources of wealth in America for decades, but has been overlooked because of the limited options homeowners have to unlock it.

With the amount of wealth tied up in equity reaching record highs, Wall Street has become increasingly aggressive in finding ways to tap into it. 

Americans now hold $34.7 trillion in home equity – more than the entire U.S. GDP. Of that, mortgage holders account for $17.6 trillion, and roughly $11.5 trillion is considered "tappable," according to data from ICE Mortgage Technology.

It's a mountain of wealth. And Wall Street wants in.

Wall Street's New Favorite Asset: Your Home

Homeowners once used cash-out refinancing to access their equity, but with 30-year mortgage rates hovering around 7%, that's no longer viable for many. Instead, homeowners are leaning into second mortgages, HELOCs, and other equity-tapping strategies that let them keep their original low-rate mortgage in place. That has ignited a boom in securitized debt backed by home equity.

Wall Street is already cashing in. 

In 2024, firms issued over $18 billion in bonds backed by home equity products, triple the amount from the year before, and the pace hasn't slowed down in 2025. Firms like Annaly Capital, Angel Oak, and even Rocket Companies are creating a pipeline of second-lien and HELOC-backed bonds for institutional buyers.

Check out: Wall Street has been quietly buying up equity in owner-occupied homes, and the strategy is kind of genius. Here's how one company is using it to produce 15%+ annual returns for its investors.

Why Wall Street Is Pouring Billions Into Home Equity

Three major forces are driving this frenzy:

• Record-high homeowner equity, with average leverage at just 45%
• High mortgage rates make cash-out refinancing impractical
• Institutions are hungry for stable, yield-producing investments backed by real assets

What stands out most is how quickly this is evolving. Forward flow agreements, where investors commit to buying loans before they're even made, are becoming more common. And securitizations are ramping up, drawing in more institutional players each quarter.

There's also growing demand for alternative structures. Home Equity Agreements (HEAs), where homeowners get upfront cash in exchange for a share of future home value, are gaining traction. These deals more than tripled last year and are now drawing capital from some of the biggest names in private credit.

A New Strategy For An Old Market

While securitizing home equity loans isn't new, the scale, sophistication, and investor interest we're seeing now is. Some are comparing it to the early days of mortgage-backed securities, but this time with stronger credit quality, more regulation and far less exposure to subprime borrowers.

That doesn't mean it's risk-free. If home prices fall or unemployment spikes, some of these bets could sour. But for now, the fundamentals, like low housing supply, high demand and strong consumer balance sheets, are working in Wall Street's favor.

Read next: Wall Street's latest obsession? Taking slices of your neighbor's home equity and turning it into double-digit returns. Here's how individual investors are also cashing in.

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