ATTOM’s latest data showed equity cushions easing, not evaporating, for most borrowers
After several years of rapid price gains, US homeowner equity appeared to move off the boil in late 2025, with new data pointing to a market that begins to normalize rather than crack.
ATTOM’s fourth quarter 2025 US Home Equity & Underwater Report found that 44.6% of mortgaged properties were equity rich, down from 46.1% in Q3 and below the 49.2% peak logged in mid‑2024.
At the same time, the share of seriously underwater loans ticked up to 3.0% from 2.8% the prior quarter, still near historic lows compared with pre‑pandemic levels above 6%.
“After years of rapid gains, homeowner equity is settling into a more sustainable range, and that’s not a negative sign for the market,” Rob Barber, CEO at ATTOM, said.
“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. As we move toward the spring buying season, these numbers suggest a housing market that is stabilizing rather than overheating, giving homeowners a solid financial foundation while allowing for healthier market dynamics.”
Equity cushions remains far above pre‑COVID baseline
The latest reading still sat well above early 2020, when roughly 26.5% of mortgaged homes were equity rich.
From 2019 through 2022, ATTOM’s data showed the equity‑rich share climbing from about 27% to near 49% as values surged, while the seriously underwater share fell from above 6% to below 3%.
In Q4 2025, Vermont led the nation with 87% of mortgaged homes equity rich, followed by New Hampshire (60.2%), Rhode Island (59.4%), Maine (58.1%) and Montana (57.3%).
States such as Louisiana (20.1%), Maryland (28.4%) and Kentucky (32.1%) remained at the bottom of the equity‑rich rankings, underscoring the widening regional split between high‑cost coastal markets and many Southern and interior states.
ATTOM’s county‑ and ZIP‑level breakouts again showed clusters of highly equity‑rich pockets in parts of the Midwest and coastal metros, even as more than 10% of loans were seriously underwater in only a small share of ZIP codes.
Normalization, not distress, for mortgage risk
ATTOM’s broader research in 2025 showed home prices hitting new highs even as margins compressed and access to ownership diverged between cash‑heavy buyers and financed borrowers.
“Home prices kept climbing in 2025 even as affordability challenges intensified for households across the country,” Barber said in an earlier year‑end sales report.
Industry sources also linked robust equity buffers to muted distress. Speaking to Mortgage Professional America about rising foreclosures in late 2025, Amir Nurani, broker-owner at the California-based Left Coast Leaders, said many long‑tenured owners still sat on “record amounts of equity.”
“Those homes aren’t going to go into foreclosure. Those individuals are going to sell those homes before they let the house go. So when you see foreclosures, it’s because selling really isn’t an option and extracting equity to relieve pain isn’t an option. Foreclosure ends up being the last resort,” he said.
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