Stagnating Home Values Cause Increase in Negative Equity
As home prices stagnated, home equity also declined in Q-2 2025. According to property data provider Cotality’s Q-2 2025 Homeowner Equity Report, borrower equity decreased by 0.8%, or by $141.5 billion, dragging down overall U.S. home equity to $17.5 trillion.
More homeowners had negative equity in Q-2 2025
Declines in home values have caused more homes to experience negative equity; that is, value lower than what owners paid or owe. In Q-2 2025, the share of homes with negative equity grew from 1.7% to 2% year-over-year, equating to about 175,000 more homes with negative equity as of Q-2 2025.
Where did home equity grow the most?
Of course, not all homeowners are experiencing an equity drain. In much of the Northeast, home equity is growing. At $37,200, Connecticut saw the most year-over-year equity growth, followed by New Jersey with $36,200 year-over-year growth, and in Rhode Island with $31,200 growth in the same period.
Home equity is settling down after years of strong growth
- Home Equity Reaches Record High in June: Nationwide, home equity reached $17.6 trillion in June 2025.
- As Home Prices Rise, US Homeowner Equity Reaches New High in Q2 2024: In Q-2 2024, 49.2% of U.S. mortgaged residential properties were equity-rich, up from 45.9% in the prior quarter.
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