IRVINE, CA — Nearly 45 percent of mortgaged homes in the United States remained equity-rich at the end of 2025, even as homeowner equity cooled modestly after years of rapid appreciation, according to ATTOM’s fourth-quarter U.S. Home Equity & Underwater Report.
The report found that 44.6 percent of mortgaged residential properties were equity-rich in the fourth quarter, meaning loan balances totaled no more than half of estimated market values. That share declined from 46.1 percent in the third quarter and from a recent peak of 49.2 percent in mid-2024, marking the lowest level since late 2021.
At the same time, the share of seriously underwater mortgages edged higher but remained historically low. ATTOM reported that 3.0 percent of mortgaged homes were seriously underwater in the fourth quarter, up slightly from 2.8 percent in the prior quarter. Seriously underwater properties are defined as those where loan balances exceed estimated market value by at least 25 percent.
“After years of rapid gains, homeowner equity is settling into a more sustainable range, and that’s not a negative sign for the market,” said Rob Barber, chief executive officer of ATTOM. “Even with a modest pullback in equity-rich properties and a slight uptick in seriously underwater homes, overall equity levels remain remarkably strong by historical standards.”
ATTOM noted that the U.S. housing market experienced a dramatic rise in homeowner equity between 2019 and 2022, with the share of equity-rich mortgages climbing from about 27 percent to nearly 49 percent as home prices surged. Over the same period, seriously underwater rates were cut by more than half, falling below 3 percent nationwide.
The fourth-quarter data show that equity levels have eased from recent highs but continue to reflect broad stability. The portion of equity-rich mortgages remained well above the 26.5 percent level recorded in early 2020, despite quarterly and annual declines in 42 states.
States with the largest year-over-year drops in equity-rich homes included Florida, Kentucky, South Carolina, New Mexico, and Arizona. By contrast, modest annual gains were recorded across parts of the Northeast and Midwest, including Alaska, North Dakota, Illinois, South Dakota, and New York.
Seriously underwater mortgage rates showed limited movement across most of the country. Improvements were recorded in states such as North Dakota, South Dakota, Wyoming, and Idaho, while the largest increases were seen in Mississippi, Kentucky, the District of Columbia, Louisiana, and Maryland.
The highest concentrations of equity-rich homes were clustered in the Northeast and West. Vermont led the nation with 87.0 percent of mortgaged homes classified as equity-rich, followed by New Hampshire, Rhode Island, Maine, and Montana. States with the lowest shares were concentrated in the Midwest and South, led by Louisiana at 20.1 percent.
County-level data showed a strong Midwest presence among the most equity-rich markets, particularly in Michigan and Wisconsin. In contrast, counties with the smallest equity cushions were heavily concentrated in the South.
Despite regional disparities, ATTOM said the overall picture points to a housing market moving toward balance rather than distress.
“As we move toward the spring buying season, these numbers suggest a housing market that is stabilizing rather than overheating,” Barber said, adding that strong equity positions continue to give homeowners a solid financial foundation.
The full report is based on ATTOM’s analysis of more than 155 million U.S. properties using loan-to-value estimates derived from public mortgage, deed, and valuation data.
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