IRVINE, Calif. — The share of U.S. mortgaged homes considered equity-rich fell to 41.1% in the second quarter, its lowest level in nearly five years, while the share of seriously underwater homes is up half a percentage point from last year, led by four states and the District of Columbia, according to ATTOM.
ATTOM’s second-quarter 2026 U.S. Home Equity & Underwater Report found the equity-rich share declined from 43.3% in the first quarter and 47.4% a year earlier. It was the fourth consecutive quarterly decline.
A property is considered equity-rich when the combined estimated balances of loans secured by the property are no more than half of its estimated market value.
Meanwhile, 3.2% of mortgaged residential properties were considered seriously underwater, unchanged from the first quarter but up from 2.7% a year earlier. ATTOM defines seriously underwater properties as those where combined loan balances are at least 25% greater than the property’s estimated market value.
Healthier Than 2020, But…
“These two measures of home equity strength, the rates of equity-rich and seriously underwater homes, remain healthier than they were prior to 2020,” ATTOM CEO Rob Barber said in a statement. “However, both have been moving in less favorable directions over the past year, suggesting a trend worth watching.”
Equity-Rich Rates Decline in Most States
Only four states recorded year-over-year increases in their shares of equity-rich homes, although 13 states posted increases from the first quarter.
According to ATTOM, the four states with annual gains were:
- North Dakota: 32.9%, up from 30.2%.
- South Dakota: 53.6%, up from 52.1%.
- Kentucky: 36.5%, up from 35.1%.
- Wyoming: 46.6%, up from 45.3%.
Minnesota posted the largest decline, with its equity-rich rate falling to 20.1% from 37.6% a year earlier. Other large declines occurred in Michigan, where the rate fell to 39.3% from 50.8%; California, to 45.6% from 56.9%; Washington, to 43.2% from 52.4%; and Missouri, to 37.8% from 46.1%.
Vermont had the nation’s highest proportion of equity-rich homes at 78.9%, followed by Montana at 59%, Rhode Island at 54.9%, South Dakota at 53.6% and New Hampshire at 53.1%, the ATTOM data show.
Seriously Underwater Rate Surges in Minnesota
Meanwhile, ATTOM reported the share of seriously underwater properties increased from a year earlier in 33 states and the District of Columbia. Rates increased from the first quarter in 18 states.
Minnesota recorded by far the largest annual increase, with 12.1% of mortgaged homes considered seriously underwater, up from 2.6% a year earlier.
According to ATTOM, other significant increases occurred in:
- South Dakota: 5.7%, up from 3.1%.
- Iowa: 7.8%, up from 5.9%.
- Michigan: 4%, up from 2.5%.
- District of Columbia: 5%, up from 3.7%.
Louisiana recorded the largest annual improvement, with its seriously underwater rate falling to 10.3% from 11.9%. Kentucky, North Dakota, Oklahoma and New York also posted some of the largest declines.
Minnesota had the highest seriously underwater rate nationally at 12.1%, followed by Louisiana at 10.3%, Iowa at 7.8%, Mississippi at 6.4% and Arkansas at 6%.
Equity Declines Across Nearly All Major Metros
The weakening in homeowner equity was widespread among major metropolitan areas.
ATTOM analyzed 108 metropolitan statistical areas with populations of at least 500,000 and sufficient data. The share of equity-rich homes declined from the previous quarter in 73 metros, or 67.6%.
Compared with a year earlier, however, the decline was much broader: 104 of the 108 metros, or 96.3%, had lower equity-rich rates.
The metros with the highest equity-rich rates were:
- San Jose, Calif: 59.1%.
- Portland, Maine: 56.4%.
- New York: 54.7%.
- Buffalo, N.Y.: 54.4%.
- Providence, R.I.: 53.1%.
At the other end, Baton Rouge, Louisiana, had the lowest equity-rich rate at 15.4%, followed by Minneapolis at 16.9%, Fresno, California, at 18.1%, New Orleans at 19.9% and Richmond, Virginia, at 22.1%.
Minneapolis also had the highest seriously underwater rate among the large metros at 13.4%. Fresno and Baton Rouge were next, both at 10.9%, followed by New Orleans at 8.5% and Richmond at 6.7%.
County Equity Levels Show Wide Divide
ATTOM’s county-level analysis showed substantial differences in homeowner equity around the country.
Park County, Montana, had the highest share of equity-rich homes at 94.7%, followed by Codington County, South Dakota, at 92.2%; Lawrence County, South Dakota, at 89%; Marquette County, Michigan, at 86.4%; and Chittenden County, Vermont, at 86.3%.
The lowest equity-rich rates were recorded in Saint Bernard Parish, Louisiana, at 10.8%; Sherburne County, Minnesota, at 12.6%; Iberville Parish, Louisiana, at 12.7%; Bossier Parish, Louisiana, at 12.8%; and Long County, Georgia, at 13.3%.
Just 21% of ZIP Codes Have Majority Equity-Rich Homes
ATTOM also found that at least half of mortgaged homes were equity-rich in just 21%, or 1,861, of the 8,865 ZIP codes with enough data to analyze.
The highest equity-rich rates were concentrated in several communities in Montana, South Dakota and Michigan.
ZIP code 59047 in Livingston, Montana, led the country at 94.8%, followed by 57201 in Watertown, South Dakota, at 92.3%; 57783 in Spearfish, South Dakota, at 90.4%; 57702 in Rapid City, South Dakota, at 88.8%; and 49855 in Marquette, Michigan, at 87.9%.
ATTOM calculates property equity using estimated property values and record-level loan models that estimate the position and amount of loans secured by mortgaged residential properties.
