US Homeowners Equity Declines to Near Five-Year Low

The share of U.S. homes with substantial homeowner equity has fallen to a near five-year low. Attom, a property data firm, reported that only 41% of U.S. homes with mortgages were equity-rich in the second quarter of the year. This figure represents a decrease from 43% in the first quarter and a significant drop from 47% a year prior.

To be classified as equity-rich for the report, a homeowner's mortgage balance must be no more than half of the home's estimated market value. This marks the fourth consecutive quarter of decline in home equity. During the same period, 3.2% of homes were considered "seriously underwater," meaning their loan balances exceeded their estimated market value by over 25%. While this rate remained stable from the previous quarter, it is up from 2.7% a year ago.

"These two measures of home equity strength... remain healthier than they were prior to 2020," Attom CEO Rob Barber stated in the report. "However, both have been moving in less favorable directions over the past year, suggesting a trend worth watching."

Home equity trends vary significantly by state. Thirteen states saw an increase in their equity-rich home rates quarter-over-quarter, but only four states experienced year-over-year growth compared to 2025. States with rising year-over-year equity rates included North Dakota, South Dakota, Kentucky, and Wyoming, with North Dakota leading the growth.

States with the highest share of equity-rich homeowners included Vermont (79%), Montana, Rhode Island, South Dakota, and New Hampshire. Conversely, most states saw declines. Minnesota experienced the largest annual drop (from 38% to 20%), with Michigan, California, Washington, and Missouri also seeing decreases of around 10% or more. Notably, 18 states saw an increase in seriously underwater homes during the second quarter, and 33 states saw year-over-year increases. In Minnesota and Louisiana, over 10% of homes are now seriously underwater.