Homeowners are sitting on a lot of cushion.

What The Numbers Say

Owners are not being forced to sell.

Negative equity remains limited. Cotality reported that roughly 1.9% of mortgaged homes were underwater, equal to about 970,000 properties. That is a real number, but it is not the kind of broad distress that rewrites a market overnight.

Home-equity borrowing is also active. The article cited $77 billion in home-equity loan and HELOC originations in the first quarter of 2026, up from $54 billion a year earlier.

Translation: many owners are using equity as capital. They can remodel, consolidate debt, fund another purchase, or simply wait. That patience keeps inventory tight.

The LA Read

Equity is both cushion and lock-in.

In Southern California, the combination of high equity, low legacy mortgage rates, and expensive replacement housing gives many owners a rational reason not to move.

That keeps supply limited. It also means motivated sellers tend to be motivated by life, not panic: family changes, estate planning, job moves, property condition, taxes, insurance, or the desire to simplify.

For buyers, the opportunity is usually not waiting for forced selling. It is finding the owner whose next chapter is more important than squeezing every last theoretical dollar from the property.

The Takeaway

A cushioned market can still be a difficult market.

The equity picture helps explain why housing has remained more resilient than many rate-focused forecasts expected. Owners have balance-sheet strength. Buyers have payment pressure. Supply sits in the middle.

For Los Angeles, the useful conclusion is not that prices can never soften. They can. The better point is that broad distress is not the current base case when so many owners have substantial equity and limited urgency.