New ATTOM data shows the share of equity-rich homes has fallen to its lowest point since late 2021, while underwater mortgages hit a four-year high
The share of American homeowners sitting on substantial equity cushions fell to its lowest level in more than four years in the first quarter of 2026, according to new data from ATTOM.
Just 43.3% of mortgaged residential properties nationwide were considered equity-rich in Q1 2026 — meaning combined loan balances secured by those properties amounted to no more than half of their estimated market value.
That figure declined from 44.6% in the prior quarter and marked the lowest rate of equity-rich properties since the fourth quarter of 2021.
At the same time, the proportion of seriously underwater mortgages, where outstanding loan balances exceed a property's estimated value by at least 25%, ticked up to 3.2%. That's the highest it has been since the first quarter of 2022. That compares with 3% the prior quarter and 2.8% a year earlier.
"Homeowner equity remains relatively strong overall, but we're seeing signs of moderation," said Rob Barber, CEO of ATTOM.
"As mortgage rates have risen and home prices have cooled, the share of equity-rich homes has declined in most markets while the rate of seriously underwater properties is edging up across much of the country."
A tale of two regions
The data reveals a widening geographic divide in equity health. Vermont led all states with 85.7% of mortgaged homes equity-rich in Q1 2026, followed by New Hampshire (58.1%), Montana (57.7%), Rhode Island (57.2%), and Hawaii (55.8%).
On the other hand, Louisiana continued to record the nation's highest share of seriously underwater properties at 11.8%, followed by Kentucky at 8.5%, Mississippi at 8%, Oklahoma at 6.6%, and Arkansas at 6.4%.
The District of Columbia saw the sharpest year-over-year increase in underwater mortgages, jumping to 5.3% from 3.8% a year earlier.
Several Sun Belt states that have been standout performers during the housing boom posted some of the steepest annual equity declines.
Florida's equity-rich share dropped from 49.3% to 43.2%, while Arizona fell from 49.8% to 44.2%, Colorado from 45.8% to 40.5%, North Carolina from 47.2% to 42.1%, and Texas from 47.4% to 42.5%.
Year-over-year gains in equity-rich rates were concentrated in just a handful of states, particularly Illinois, Alaska, South Dakota, North Dakota, New York, and Wisconsin, highlighting how narrow the pockets of improvement have become.
Read more: Homeowner equity 'remarkably strong' despite jump in underwater loans
Metro markets feel the squeeze
The share of equity-rich homes fell quarter-over-quarter in 87% of the 107 metropolitan statistical areas analyzed by ATTOM, and declined year-over-year in 86% of those markets.
California's coastal metros continued to dominate the top of the rankings. San Jose led the country with 65.2% of mortgaged homes considered equity-rich, followed by Los Angeles at 59.3%, San Diego at 58.2%, Portland, ME at 57.9%, and Buffalo, NY at 56.7%.
Louisiana once again claimed the bottom positions. Baton Rouge recorded the nation's lowest equity-rich rate at 17.4%, followed by New Orleans at 19.1%.
Both cities also ranked among the metros with the highest rates of seriously underwater homes, with Baton Rouge at 11.9%, New Orleans at 10.2%, and Jackson, MS at 10.4%.
Michigan's rural counties stood out in ATTOM's zip code and county-level data. Of the 30 counties with the highest share of equity-rich properties, 23 were located in Midwestern states, including 11 in Michigan, seven in Wisconsin, and four in Indiana.
Benzie County, MI led the country with a 94.5% equity-rich rate.
Nationally, at least half of mortgaged properties were equity-rich in 28.2% of the roughly 9,000 zip codes analyzed.
While the headline numbers point to moderation, brokers and lenders should note that the data also confirms how much equity many American homeowners still hold relative to historical baselines — a factor that continues to support home equity origination activity, which has been rising for six consecutive quarters.
The question for the market now is whether the current trajectory stabilizes through the second half of 2026 or continues to erode as affordability headwinds persist.
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