Home Equity Levels Begin to Stabilize as the Housing Market Finds Better Balance

After several years of rapid appreciation, the U.S. housing market is showing signs of stabilization — and that’s good news for long-term health. According to the latest Home Equity & Underwater Report from ATTOM Data Solutions, the share of equity-rich properties has begun to decline modestly, signaling that the market is moving toward a more sustainable balance between buyers and sellers.

In the third quarter, 46.1% of mortgaged homes were considered equity rich — meaning owners owed no more than half of their home’s estimated market value. That’s down slightly from 47.4% in the previous quarter and 48.3% a year earlier, reflecting the gradual cooling of home price growth nationwide.

Rob Barber, ATTOM’s CEO, noted that this is a healthy adjustment after years of record-breaking gains. “After several years of strong equity growth that peaked in 2022, homeowner equity levels appear to be stabilizing,” Barber said. “The modest fluctuations seen over the last few quarters may suggest a housing market that’s finding balance after an extended period of appreciation.”

What This Means for Homeowners and Buyers

For homeowners, stabilizing equity means less volatility and more predictability in property values — a positive shift after years of double-digit gains. For buyers, it means less competition and fewer bidding wars, with home prices showing steadier trends rather than steep climbs.

Overall, these trends point to a healthier housing market, one that supports both affordability and long-term stability. With rates, pricing, and equity levels all starting to normalize, 2025 could bring more opportunities for well-positioned buyers and sellers alike.