Share of ‘Equity-Rich’ Homeowners Drops to Lowest in 5 Years as Underwater Mortgages Rise

The share of "equity-rich" homeowners has fallen to its lowest level in five years, while the number of homeowners with "seriously underwater" mortgages is rising, according to a new report.Both trends reflect housing market challenges, although homeowners overall remain in a better position than they were prior to 2020, and the shift primarily reflects a return to pre-pandemic norms.Equity-rich homeowners—defined as those who own at least 50% of their home's value—accounted for 41.1% of mortgaged residential properties in the second quarter, down from 43.3% in the first quarter, according to real estate analytics firm ATTOM.The latest statistic represents a drop of more than 6 percentage points from the second quarter of 2025, when 47.4% of homes were considered equity-rich. It marks the lowest share of equity-rich homes in five years.While the overall number of equity-rich homes has dropped, 13 states saw increases in equity-rich homes quarter over quarter. And four states—North Dakota, South Dakota, Kentucky, and Wyoming—saw increases in the percentage of equity-rich homes year over year.North Dakota is up 32.9% from 30.2%, South Dakota is up 53.6% from 52.1%, Kentucky is up 36....