Nearly 30% of homeowners are considering tapping equity
The share of equity-rich homes dipped modestly in the first quarter of 2025, but nearly 30% of homeowners are considering tapping into their equity through loans or HELOCs as economic pressures linger.
ATTOM’s recent report found that 46.2% of mortgaged residential properties were considered equity-rich, meaning their owners owed no more than half the home’s estimated value. That’s down from 47.7% in Q4 2024 and a peak of 49.2% in Q2 2024, though still nearly double the rate seen in Q1 2020.
“Home equity rates are near their highest points in recent years and the dip we've seen early this year in the proportion of equity-rich homes shouldn't cause too much concern,” said Rob Barber, CEO of ATTOM. “In each of the two previous years, the first quarter marked the lowest point of the year before the proportion of equity-rich homes shot back up in the second quarter.”
The proportion of seriously underwater homes, where homeowners owe at least 25% more than the property's market value, rose slightly from 2.5% in Q4 2024 to 2.8% in Q1 2025. Still, the current rate remains low and significantly improved from the 6.6% rate in Q1 2020.
On a quarterly basis, the underwater rate increased in 48 states and Washington, DC, although only 25 states and DC saw annual increases.
Home equity loans
Separate research from MeridianLink reveals growing interest in tapping home equity despite concerns about affordability. According to a nationwide survey of 1,500 homeowners, 28% say they’re considering taking out a home equity loan or HELOC in the next 12 months, up from 21% in 2022.
However, many remain cautious. Among those not considering a loan, key concerns include high interest rates (63%), risking homeownership (22%), and uncertainty about repayment terms (18%).
Read next: Broker warns against maxing out HELOC borrowers as costs soar
“Homeowners recognize the potential of home equity lending, but many are still on the sidelines due to financial uncertainty and lack of education about their options,” said JP Kelly, senior vice president of mortgage at MeridianLink.
“This presents an opportunity for financial institutions to bridge the gap by simplifying the lending application process, improving education on home equity products, and offering more competitive, flexible options.”
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