U.S. Home Equity Rebounds in Q2 Nearly Half of All Mortgaged Properties Now Considered Equity-Rich
Homeowners across the U.S. are seeing a bounce-back in property equity, with nearly half of all mortgaged residential properties now classified as “equity-rich,” according to the latest Q2 2025 U.S. Home Equity & Underwater Report from real estate data firm ATTOM.
The report revealed that 47.4% of mortgaged homes in the country had loan balances totaling no more than 50% of their estimated market value, a meaningful increase from 46.2% in Q1. This rebound ends a three-quarter skid following the equity-rich peak of 49.2% in Q2 of 2024.
“Record-high home prices are starting to yield tangible benefits for property owners again,” said Rob Barber, CEO of ATTOM. “After months of stagnation, we’re seeing positive momentum. But that trend is still regional. Homeowners in some areas especially parts of the South are still struggling to climb out from underwater mortgages.”
Equity-Rich Rates Climb in Most States, but Some See Yearly Declines
In the latest quarter, 37 states and Washington, D.C. reported gains in equity-rich properties, yet only 19 states surpassed their Q2 2024 levels. Among those making the strongest year-over-year gains:
- Connecticut: Up from 45.5% to 49.4%
- New Jersey: Rose from 50% to 53.6%
- Alaska: Increased from 31% to 33.7%
- West Virginia: Gained from 33.6% to 36.4%
- Wyoming: Moved up from 43.5% to 45.3%
However, several high-growth states saw noticeable declines in equity-rich shares:
- Florida: Dropped from 56% to 48.5%
- Arizona: Fell from 53.9% to 48.6%
- Georgia: Declined from 47.9% to 43.3%
- Colorado: Slipped from 50.7% to 46.5%
- Washington: Down from 56.5% to 52.4%
Underwater Properties Decline Slightly, But Long-Term Trends Vary
Meanwhile, 2.7% of mortgaged properties nationwide were considered seriously underwater, meaning homeowners owed at least 25% more than the property’s market value. While slightly better than the 2.8% recorded in Q1, it remains elevated from the 2.4% seen a year ago.
Year-over-year improvements were modest. Among the states that trimmed underwater rates the most:
- West Virginia: Dropped from 4.7% to 4.3%
- Mississippi: Decreased from 6.8% to 6.5%
- Connecticut: Down slightly from 1.5% to 1.4%
- North Dakota: Improved from 5.02% to 4.97%
- New Jersey: Eased from 1.71% to 1.66%
In contrast, several states saw sharp increases in the number of distressed borrowers:
- Louisiana: Up from 10.5% to 11.9%
- Kansas: Rose from 2.9% to 4.4%
- District of Columbia: Climbed from 2.8% to 3.7%
- Georgia: Increased from 2.4% to 3.2%
- Iowa: Jumped from 5.2% to 5.9%
Northeast Leads in Homeowner Equity
Some of the highest concentrations of equity-rich homeowners are in New England and the Mountain West, with Vermont leading the nation at 84.9% of mortgaged properties equity-rich. Rounding out the top five:
- New Hampshire: 60.3%
- Rhode Island: 60.3%
- Montana: 59.2%
- Hawaii: 59.2%
Conversely, homeowners in parts of the South and Midwest are faring worse. Among the states with the lowest equity-rich rates:
- Louisiana: 18%
- North Dakota: 30.2%
- Washington, D.C.: 32.7%
- Iowa: 33%
- Alaska: 33.7%
Equity-Rich and Underwater Counties: A Closer Look
ATTOM also broke down its analysis by county, reviewing only areas with at least 2,500 mortgaged properties. The most equity-rich counties in Q2 included:
- Chittenden County, Vermont: 90.7%
- Marquette County, Michigan: 90.1%
- Portage County, Wisconsin: 89.8%
- Chippewa County, Michigan: 89.7%
- Manistee County, Michigan: 89.3%
On the flip side, 19 of the 25 worst-performing counties in terms of equity-rich share were located in Louisiana, a state still grappling with deep economic and housing struggles. The counties with the lowest equity-rich rates were:
- Vernon Parish, LA: 5.9%
- Iberville Parish, LA: 8.4%
- Ascension Parish, LA: 8.7%
- Acadia Parish, LA: 9.3%
- Long County, GA: 10.2%
What’s Next for U.S. Homeowners?
While equity positions remain historically high for nearly half of mortgaged homeowners, regional disparities are becoming more pronounced. High home values in many parts of the U.S. are helping restore equity gains, but rising interest rates, inflationary pressure, and local economic challenges continue to weigh heavily on certain markets.
Experts caution that if home prices begin to soften especially in overheated markets some regions could see equity levels begin to fall again. For now, however, homeowners in many parts of the country continue to benefit from the wealth-building effects of sustained home value appreciation.
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