Nearly half of US homes remain equity-rich, but underwater rates are creeping up
Homeowner equity in the United States edged downward in the third quarter of 2025, with 46.1% of mortgaged properties considered equity-rich. That's down from 47.4% in the previous quarter and 48.3% a year earlier, according to ATTOM’s latest Home Equity & Underwater Report.
The share of homes with serious negative equity, meanwhile, ticked up to 2.8%, rising year-over-year in 46 states despite national home prices reaching a record median of $370,000.
“Over the past year, the share of equity-rich homes has eased slightly while the portion of seriously underwater properties has edged up,” Rob Barber, CEO of ATTOM, said.
“After several years of strong equity growth that peaked in 2022, homeowner equity levels appear to be stabilizing. The modest fluctuations seen over the last few quarters may suggest a housing market that’s finding balance after an extended period of appreciation.”
Equity-rich rates diverged sharply across the country. Vermont led with 86.8% of homes equity-rich, followed by New Hampshire (61.4%) and Rhode Island (59.8%).
At the other end, Louisiana posted just 18.6% equity-rich homes, with Maryland and the District of Columbia also below 30%.
Notably, the share of equity-rich homes rose in just 19 states quarter-over-quarter, with Alaska, Illinois, New Jersey, New York, and Connecticut seeing the largest annual gains. On the other hand, Florida, Arizona, Colorado, DC, and Georgia posted the steepest declines.
The proportion of seriously underwater homes—where mortgage balances exceed property values by at least 25%—rose in 35 states from the previous quarter and in 46 states year-over-year.
The District of Columbia, Maryland, Louisiana, Georgia, and Oklahoma saw the sharpest increases. Louisiana led the nation with 11.2% of homes seriously underwater, while New England states such as Vermont (0.6%) and Rhode Island (1%) maintained the lowest rates.
Regional disparities were also pronounced at the metro and county level. San Jose, CA, and Buffalo, NY, topped the list for equity-rich metros, while Baton Rouge, LA, and New Orleans, LA, had the lowest.
In the Midwest, Michigan counties dominated the top equity-rich rankings, while 21 of the 30 counties with the lowest equity-rich rates were in Louisiana.
The latest data points to a housing market in transition. While home prices have continued to climb, the pace of equity accumulation has slowed, and pockets of risk are emerging in states with high underwater rates.
This comes as mortgage rates remain elevated and affordability challenges persist, prompting some analysts to warn of potential stress among recent buyers with minimal down payments.
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