Only 41.1% of mortgaged homes in the United States are now considered “equity-rich,” meaning the owner has at least 50% equity built up against the home’s value. A year ago that number was 47.4%. That’s a 6.3 percentage point drop in a single year, and it puts the national equity-rich share at its lowest point in nearly five years, according to ATTOM’s newly released Q2 2026 Home Equity and Underwater Report. If you’ve been eyeing a sale this year, or quietly wondering whether it’s time to downsize, this is the number that should be shaping your timeline more than mortgage rates or listing photos. It doesn’t mean the sky is falling. It does mean the math you run before you sell needs to be a little more careful than it was two years ago.
What “Equity-Rich” Actually Measures, and Why It Matters to You
Equity-rich isn’t a vague feel-good term. ATTOM defines it as owing less than half of what your home is currently worth on your mortgage. It’s the single best snapshot of how much room a homeowner actually has to work with when they sell, because it tells you how much cash lands in your pocket after the loan gets paid off. When that share shrinks nationally, it means fewer people, in aggregate, have a fat check waiting for them at closing.
The report also tracked the other end of the spectrum: seriously underwater homes, where the loan balance is at least 25% higher than the home’s value. That figure ticked up too, from 2.7% a year ago to 3.2% now. It’s still a small slice of the market, and both numbers remain healthier than they were before 2020. But the direction matters. This is four straight quarters of equity-rich shares sliding, and it’s not a fluke confined to a couple of struggling metros. 96.3% of the 108 major metro areas ATTOM tracks saw their equity-rich share fall year-over-year. That’s about as close to universal as housing data gets.
Why This Happened, and Why It’s Not the Same Story as 2008
The mechanics here are pretty straightforward once you sit with them for a minute. Home price growth has cooled sharply in a lot of markets after the breakneck run-up of 2021 through 2023, while many owners who bought or refinanced in the last two or three years locked in at higher rates and haven’t had nearly as much time to pay down principal or ride a wave of appreciation. Put those two things together and the equity cushion simply hasn’t had the same chance to build. It’s less a crisis than a natural leveling-off after an unusually generous stretch, but if you bought recently, you may be feeling the tighter squeeze more than a neighbor who’s owned since 2015.
Where You Live Now Matters More Than the National Headline
Here’s the part that deserves your full attention if you’re actually planning a move this year: the national number is an average, and averages flatten out some pretty dramatic local differences. In San Jose, 59.1% of mortgaged homes are still equity-rich. Portland, Maine sits at 56.4%, and New York comes in at 54.7%, per ATTOM’s metro-level breakdown. Meanwhile, in Baton Rouge, only 15.4% of mortgaged homeowners qualify as equity-rich, and Minneapolis sits at just 16.9%.
The state-level shifts tell an even sharper story. Minnesota’s equity-rich share collapsed from 37.6% to just 20.1% year-over-year, a 17.5 point drop that’s the steepest in the country, while its seriously underwater share nearly quintupled, jumping from 2.6% to 12.1%. Michigan, California, and Washington all saw double-digit percentage point declines too. On the flip side, a handful of states, including South Dakota and Wyoming, actually gained ground. If you’re weighing a sale, your zip code’s own trend line is worth far more to you than any national headline, including this one.
The Real Math Before You List
So what do you actually do with all this if you’re sitting on a house you might want to sell this year? Start with the honest version of your own numbers, not the round-number version you’ve been carrying around in your head. Get a real sense of your current market value, subtract what you actually owe, and then subtract selling costs, typically somewhere around 8 to 10% of the sale price once you count agent commissions, closing costs, and any repairs a buyer will ask for. What’s left is your true, spendable equity, and it’s very possibly smaller than it would have been a year or two ago.
Then run the other side of the equation: what does your next place actually cost you, not just in sticker price but in the mortgage rate you’ll carry going forward. A lot of owners are sitting on rates well below what’s available today, and that gap, sometimes called the “lock-in effect,” is exactly what Cotality’s chief economist Selma Hepp has pointed to as a reason so much housing wealth is currently sitting still. In her words, this large store of equity “continues to support household net worth, but it also keeps many homeowners handcuffed” to homes they might otherwise be ready to leave, per Cotality’s most recent national equity report. Your trade-up math needs to weigh your smaller equity cushion against that new rate, honestly, before you fall in love with a listing.
The Bigger Picture: Your Equity Hasn’t Disappeared, It’s Just Grown More Slowly
It’s worth sitting with some genuinely reassuring context here too. Nationally, homeowners are still sitting on an extraordinary amount of built-up wealth. As of early 2026, mortgaged properties across the country held roughly $17.9 trillion in combined equity, with the average mortgaged borrower holding around $310,500, according to Cotality’s tracking of national home equity. Negative equity, meanwhile, remains rare, affecting under 2% of mortgaged homes by that measure. So this isn’t a story about equity vanishing. It’s a story about the growth slowing down and the distribution getting more uneven, with some homeowners still flush and others finding their cushion noticeably thinner than it was twelve months ago.
Timing It Right, for Your Market, Not the National One
If there’s one habit worth building before you list this year, it’s checking your own local equity-rich and price trends the way you’d check the weather before a road trip, not once, but as the season changes. A market where 55% of homes are equity-rich behaves very differently at the negotiating table than one where it’s 17%, and buyers in those markets are pricing that reality in whether or not they’ve read a single housing report. Talk to a local agent who can pull recent comps for your specific street, not just your metro area, and ask them directly how the equity picture has shifted there over the past year. That conversation will tell you more than any national number ever could.
The takeaway isn’t that this is a bad year to sell, and it isn’t that you should rush to beat the trend either. It’s that the cushion you’re counting on deserves a closer, more current look than it did the last time home prices were climbing everywhere at once, and that a little extra homework now is what turns a good equity number into a good decision.