Some US cities are thriving in home equity—others are falling behind
Nearly half of American homeowners with mortgages saw their home equity reach healthy levels in the second quarter of 2025, reversing a three-quarter decline, according to a new report from ATTOM, a real estate data company.
The report found that 47.4% of mortgaged residential properties nationwide were equity-rich, meaning homeowners owed no more than half their home’s current market value. This figure rose from 46.2% in the first quarter, breaking a downward trend that began after equity-rich rates peaked at 49.2% in the second quarter of 2024.
“With home prices at record highs you’d expect to see owners enjoying more equity in their homes so it’s good to see equity-rich rates rebound after a few slower quarters,” said Rob Barber, CEO of ATTOM.
While the overall picture improved, regional differences remained stark. New England states dominated the top rankings, with Vermont leading at 84.9% of homes considered equity-rich, followed by New Hampshire and Rhode Island, both at 60.3%.
Louisiana struggled at the bottom, with only 18% of mortgaged homes equity-rich. The state also had the highest rate of seriously underwater properties at 11.9%, where homeowners owed at least 25% more than their home’s value.
Connecticut showed the largest year-over-year improvement, with equity-rich rates climbing from 45.5% to 49.4%. New Jersey followed with an increase from 50% to 53.6%. Florida experienced the steepest decline, dropping from 56% to 48.5%.
The share of seriously underwater homes nationwide held relatively steady at 2.7%, down slightly from 2.8% the previous quarter but still above the 2.4% recorded in the second quarter of 2024.
Among major metropolitan areas, California cities dominated the equity-rich rankings. San Jose led with 68.4% of homes equity-rich, followed by Los Angeles at 63.4% and San Diego at 62.5%. Baton Rouge, Louisiana, ranked lowest at just 16.2%.
Michigan emerged as a surprise leader in county-level analysis, claiming 10 of the 25 counties with the highest equity-rich rates nationwide. Chittenden County, Vermont, topped the list at 90.7%.
Barber noted that the improvements weren’t evenly distributed across the country. “In some states, particularly Louisiana, too many homeowners are still struggling with loan balances that are more than their homes are worth,” he said.
The analysis covered more than 155 million properties and excluded investor transactions to focus on traditional homeowner activity.
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