Homeowner Equity Falls Amid Drop in Home Prices

Home prices have slowed in recent months, causing the share of equity-rich homes across the U.S. to fall alongside them. According to to the U.S. Home Equity & Underwater Report from property data provider ATTOM, 46.1% of mortgaged residential properties in the U.S. were equity-rich in Q-3 2025, a drop from 47.4% in Q-2 2025 and from 48.3% equity-rich properties year-over year.

While the share of equity-rich homeowners has declined, the number of underwater mortgages has increased

As equity continues to decline, a higher share of properties considered "underwater" on their mortgages in Q-3 2025. According to the report, about 2.8% of mortgaged residential properties in the U.S. were considered seriously underwater in Q-3, compared with 2.7% the prior quarter and 2.5% the prior year.

Where is home equity still growing? 

In Q-3 2025, the share of equity-rich homes rose in 19 states compared with the prior quarter and in 11 states compared with the prior year. The state with the largest year-over-year increases in the share of equity-rich homes was Alaska, where the share of equity-rich homes increased from 31.9% to 34.3%. Alaska was followed by Illinois and then New Jersey. In Illinois, the share of equity rich-homes grew from 34% to 35.8%; in New Jersey, they grew from 52% to 53.8%.

The decline in equity is a shift from previous years of strong equity growth

• Home Equity Is Growing, but So Is Negative Equity: In Q-4 2024, home equity increased by 1.7%, or by $281.9 billion.  
• Homeowner Equity Rises Despite Falling Home Values: In Q-2 2025, 47.4% of mortgaged residential properties in the U.S. were equity-rich, compared with 46.2% the prior quarter.