Join our FREE personalized newsletter for news, trends, and insights that matter to everyone in America

Newsletter
New

Home Equity Grows In Q2 Even With Falling Home Prices

Card image cap

Nearly half of mortgaged homes in the U.S. were equity-rich in the second quarter of 2025, according to ATTOM’s latest U.S. Home Equity & Underwater Report.

The analysis found that 47.4% of mortgaged residential properties had loan balances no greater than half their estimated market value — an increase from 46.2% in the first quarter.

This rise reverses a downward trend seen over the past three quarters. The equity-rich share had declined after peaking at 49.2% in the second quarter of 2024.

“With home prices at record highs you’d expect to see owners enjoying more equity in their homes so it’s good to see equity-rich rates rebound after a few slower quarters,” said Rob Barber, CEO of ATTOM.

Uneven gains across the country

Despite the national increase, the equity rebound wasn’t consistent nationwide.

“Unfortunately, the increase in equity-rich rates we saw in the second quarter hasn’t been spread evenly throughout the country,” Barber said. “In some states, particularly Louisiana, too many homeowners are still struggling with loan balances that are more than their homes are worth.”

The share of equity-rich homes increased quarterly in 37 states and the District of Columbia. However, only 19 states saw annual gains.

States with the largest year-over-year increases included Connecticut (up to 49.4%), New Jersey (53.6%), Alaska (33.7%), West Virginia (36.4%) and Wyoming (45.3%).

The steepest annual declines were in Florida (down to 48.5%), Arizona (48.6%), Georgia (43.3%), Colorado (46.5%) and Washington (52.4%).

Underwater homes decline slightly

Meanwhile, the share of seriously underwater homes — those with loan balances at least 25% higher than property values — ticked down to 2.7% nationally, from 2.8% in Q1.

That’s still above the 2.4% level from the same quarter last year.

Thirty-one states and the District of Columbia saw quarterly drops in seriously underwater properties. However, only eight states saw annual improvements. The biggest year-over-year declines were in West Virginia, Mississippi, Connecticut, North Dakota and New Jersey.

Conversely, the states with the largest increases in seriously underwater homes were Kansas (up to 4.4%), Louisiana (11.9%), the District of Columbia (3.7%), Georgia (3.2%) and Iowa (5.9%).

Regional disparities

New England had the highest concentration of equity-rich homes, led by Vermont (84.9%), New Hampshire (60.3%) and Rhode Island (60.3%).

By contrast, Louisiana had the lowest rate at 18%, followed by North Dakota, the District of Columbia, Iowa and Alaska.

Among metro areas with over 500,000 people, San Jose, Calif. had the highest share of equity-rich homes at 68.4%. Baton Rouge, La. had the lowest at 16.2%.

Michigan had 10 of the 25 counties with the highest equity-rich shares. Top counties included Chittenden, Vt. (90.7%), and Marquette, Mich. (90.1%).

Louisiana had 19 of the 25 counties with the lowest shares, led by Vernon Parish at just 5.9%.

Nationwide, 41.7% of ZIP codes had at least half of mortgaged homes classified as equity-rich, up from 37% in the previous quarter.

The highest-ranking ZIP code was 49855 in Marquette, Mich. — with 92% equity-rich homes.

Highest rates of underwater homes remain concentrated

Louisiana continued to have the highest share of seriously underwater homes at 11.9%, followed by Kentucky, Mississippi, Iowa and Oklahoma. Vermont had the lowest rate at 0.7%.

In metro areas, Baton Rouge led in underwater homes at 11.6%, while San Jose, Calif., had the lowest rate at 0.6%.

Among ZIP codes, the highest concentrations of underwater properties were in 11937 in East Hampton, N.Y. (41%) and 19132 in Philadelphia (30%).