More Than 40% of U.S. Homes Are Equity-Rich: What That Means for Homeowners and Homebuyers in 2026

For many Americans, a home isn't just a place to live. Over time, it can also become one of the largest assets they own.

That happens because of home equity.

Every mortgage payment can help reduce the amount owed on a home, while increases in property value can add another layer of equity. Over years of homeownership, those two forces can create a substantial difference between what a homeowner owes and what the property is worth.

Despite some recent cooling in the housing market, millions of American homeowners remain in a very strong equity position.

According to ATTOM's second-quarter 2026 U.S. Home Equity & Underwater Report, 41.1% of mortgaged residential properties in the United States were considered "equity-rich."

ATTOM defines an equity-rich property as one where the combined estimated loan balances are 50% or less of the property's estimated market value.

Put more simply, an equity-rich homeowner owes less than half of what the home is estimated to be worth.

That's a substantial financial cushion.

However, the latest data also shows that the percentage of equity-rich homeowners has been declining. The 41.1% figure is down from 43.3% during the first quarter of 2026 and 47.4% one year earlier.

So homeowners still have historically significant levels of equity—but the trend is worth watching.

For current homeowners and potential homebuyers in New Jersey, Pennsylvania, Delaware and Florida, there are several important lessons behind these numbers.

What Does It Mean to Have Equity in Your Home?

Home equity is the difference between the value of your property and the amount you still owe against it.

For example, imagine that your home is worth $500,000 and you owe $300,000 on your mortgage.

You would have approximately $200,000 in gross home equity.

The calculation is:

Estimated home value – mortgage balance = estimated home equity

In that example:

$500,000 – $300,000 = $200,000

That doesn't necessarily mean you would receive $200,000 if you sold the home tomorrow. Selling costs, additional liens and other expenses could affect the actual proceeds.

But it provides a basic picture of your ownership position.

What Does "Equity-Rich" Mean?

ATTOM uses a more specific definition when it describes a homeowner as equity-rich.

To qualify as equity-rich under its methodology, the combined estimated balance of loans secured by the property must be no more than half of the property's estimated market value.

Using another example:

Suppose your home is worth $600,000.

If you owe $300,000 or less against it, the property could fall into ATTOM's equity-rich category.

Someone who owes $450,000 on the same $600,000 property still has significant equity—approximately $150,000—but wouldn't meet ATTOM's definition of equity-rich.

That's an important distinction.

The 41.1% statistic doesn't mean only 41.1% of homeowners have equity.

It refers specifically to mortgaged homes with particularly strong equity positions.

More Than Four in Ten Mortgaged Homes Are Equity-Rich

The fact that 41.1% of mortgaged residential properties qualify as equity-rich remains significant.

Housing values increased dramatically in many parts of the country during and following the pandemic-era housing boom.

Homeowners who purchased before those increases may have benefited from substantial appreciation.

At the same time, homeowners who continued making mortgage payments reduced their loan balances.

Together, rising property values and declining mortgage balances helped create historically high levels of homeowner equity.

Even after the recent decline in the percentage of equity-rich properties, ATTOM says the measure remains healthier than it was before 2020.

That's important context.

The latest report isn't saying that American homeowners suddenly have little equity.

It's showing that an extremely strong equity position has begun to moderate.

Why Did the Percentage of Equity-Rich Homes Decline?

There isn't necessarily one single reason.

Home equity is influenced by both sides of the equation:

What the property is worth and how much the homeowner owes.

If home prices rise quickly while mortgage balances decline, equity generally grows.

If home prices flatten or fall, equity growth can slow or reverse.

Homeowners can also reduce their equity by borrowing against their property through certain home-equity loans, lines of credit or other financing.

Recent housing market conditions have been much different from the rapid price appreciation seen during the pandemic-era market.

Many markets have become more balanced.

Homes are taking longer to sell in some areas.

Inventory has increased.

Buyer competition has cooled.

Price growth has moderated.

Those conditions can naturally slow the pace at which homeowners accumulate equity through appreciation.

Homeowners Still Have Considerable Financial Cushion

The decline from 47.4% equity-rich a year ago to 41.1% today is worth monitoring, but it shouldn't be interpreted as evidence that homeowners broadly have no equity.

Quite the opposite.

More than four out of every ten mortgaged residential properties continue to meet ATTOM's fairly demanding equity-rich threshold.

And many additional homeowners who don't qualify as equity-rich still have positive equity.

That's one of the major differences between today's housing environment and periods when large numbers of homeowners owed more than their properties were worth.

What Does "Seriously Underwater" Mean?

ATTOM also tracks the opposite side of the equity spectrum.

A seriously underwater property is one where the combined estimated balances of loans secured by the property are at least 25% greater than the property's estimated market value.

For example, if a home were estimated to be worth $400,000 but the owner owed $500,000 or more against it, it could fall into that category.

During the second quarter of 2026, ATTOM reported that 3.2% of mortgaged residential properties were seriously underwater.

That percentage was unchanged from the prior quarter but higher than the 2.7% recorded a year earlier.

Again, the movement is worth watching, but the overall percentage remains relatively small compared with the share of homeowners who have substantial equity.

How Do Homeowners Build Equity?

There are two primary ways homeowners build equity.

1. Paying Down the Mortgage

When you make payments on a traditional amortizing mortgage, part of the payment goes toward interest and part goes toward reducing the principal balance.

In the early years of many mortgages, a larger portion of each payment goes toward interest.

Over time, increasingly more of the payment generally goes toward principal.

As the loan balance declines, the homeowner's ownership stake grows—assuming the property's value doesn't decline by an equal or greater amount.

2. Home Appreciation

The second way equity can increase is through rising property values.

Suppose you purchased a home for $350,000 several years ago and it is now worth $475,000.

Even if you had never made additional principal payments beyond your normal mortgage schedule, that increase in value could create substantial additional equity.

This is one reason long-term homeownership has historically been an important source of household wealth for many Americans.

However, home prices aren't guaranteed to increase every year, and appreciation varies greatly by market.

Equity Doesn't Grow in a Straight Line

It's important for homeowners and buyers to understand that home equity isn't guaranteed to rise every year.

Housing markets move in cycles.

A home can increase substantially in value during one period, remain relatively flat during another and potentially lose value during a downturn.

The experience also varies tremendously by location.

Home values in South Jersey could behave differently from values in Florida.

Philadelphia-area suburbs may experience different trends than coastal Delaware.

Even neighboring towns can produce very different appreciation rates.

That's why a home should generally be viewed as a long-term asset rather than something guaranteed to produce a specific short-term return.

Why Home Equity Matters When You Sell

One of the most obvious benefits of equity becomes apparent when you sell your home.

Suppose your home sells for $600,000 and you owe $250,000 on your mortgage.

Before accounting for selling expenses and other obligations, there's a $350,000 difference between the sale price and mortgage balance.

That accumulated equity may help fund the purchase of your next home.

A homeowner could potentially use part of the proceeds toward:

• A larger down payment

• Closing costs

• Paying off other obligations

• Moving expenses

• Home improvements

• Investments or savings

• Purchasing the next home with less financing

For move-up buyers, accumulated equity can dramatically change the next home purchase.

Today's Homeowners May Have an Advantage When Buying Their Next Home

High home prices can be challenging for first-time buyers.

But homeowners selling one property and purchasing another may be in a different position because of the equity accumulated in their current home.

Imagine someone purchased a home years ago for $275,000.

The home is now worth $450,000, and the remaining mortgage balance is $175,000.

That homeowner could have substantial equity available after a sale.

Depending on the actual sales proceeds and expenses, some of that money could potentially become the down payment on the next home.

That can reduce the new mortgage balance and potentially make moving into a higher-priced property more manageable.

The "Mortgage Rate Lock-In Effect" Can Complicate Things

Equity isn't the only financial factor homeowners consider when deciding whether to move.

Many current homeowners also have mortgages with interest rates below today's prevailing market rates.

That creates a difficult decision.

A homeowner may have substantial equity and be financially capable of purchasing another home—but moving could mean giving up a very low existing mortgage rate.

This has contributed to what the housing industry often calls the rate lock-in effect.

Some homeowners decide they'd rather remain in their current property than replace a low-rate mortgage with a new loan at a higher rate.

That has also affected housing inventory because fewer existing homeowners listing their properties means fewer homes available for buyers.

Equity Can Help Overcome Some of the Rate Difference

For certain homeowners, however, substantial equity can help offset some of the financial impact of moving.

A homeowner who realizes significant proceeds from selling a property may be able to make a larger down payment on the next home.

A larger down payment means borrowing less.

Borrowing less can potentially reduce the new monthly principal and interest payment, even though the mortgage rate may be higher than the rate on the homeowner's previous loan.

This is why homeowners thinking about moving shouldn't automatically assume that giving up a low rate makes a new purchase impossible.

The correct approach is to run the numbers.

Don't Compare Mortgage Rates Alone

Suppose you currently owe $200,000 on a home with a low mortgage rate.

You want to purchase a $600,000 home.

If selling your existing property provides $250,000 that you decide to use toward the next purchase, you may only need to finance a portion of the new home's price.

The new mortgage rate may be higher, but the loan amount and complete monthly payment matter too.

Property taxes matter.

Homeowners insurance matters.

HOA fees may matter.

The down payment matters.

Simply comparing your old mortgage rate with today's rate doesn't give you enough information to decide whether moving is affordable.

First-Time Homebuyers Build Equity Differently

First-time buyers don't have equity from a previous home to bring to their purchase.

That can make getting started more challenging.

But once someone becomes a homeowner, the process of building equity can begin.

Part of each qualifying mortgage payment reduces the loan balance.

Over time, that can gradually increase the homeowner's stake in the property.

If the property also appreciates, equity may build faster.

That's one of the major differences between renting and owning.

Rent provides housing.

A mortgage payment can provide housing while also gradually reducing a debt secured by an asset the homeowner owns.

That doesn't automatically mean buying is always financially better than renting.

Homeowners also have maintenance costs, taxes, insurance and other responsibilities.

But equity accumulation is an important factor when comparing the two.

How Long Does It Take to Build Significant Home Equity?

There isn't one answer.

It depends on:

• The purchase price

• The down payment

• The mortgage amount

• The mortgage term

• How long you own the home

• Whether you make additional principal payments

• Property value changes

• Whether you borrow against the property

Someone who puts 20% down begins with more equity than someone using a low-down-payment mortgage.

But that doesn't mean putting 20% down is always required or necessarily the best decision.

Many buyers successfully purchase homes with considerably smaller down payments.

The important thing is choosing a financing strategy that fits your circumstances.

You Don't Necessarily Need 20% Down to Buy a Home

This is one of the most persistent mortgage misconceptions.

Many potential buyers assume they need a 20% down payment.

They often don't.

Depending on the borrower's qualifications, property and loan program, homebuyers may have access to conventional loans with lower down payments, FHA financing, VA loans for eligible borrowers, USDA financing for eligible properties and borrowers, and other options.

Mortgage insurance or other requirements may apply depending on the program and down payment.

But buyers shouldn't remain on the sidelines simply because they haven't saved 20%.

A mortgage review can help determine which options may be available.

Does a Larger Down Payment Mean More Equity?

Yes, all other factors being equal.

If you buy a $500,000 home with $100,000 down, you begin with approximately $100,000 of equity based on the purchase price, excluding transaction costs and assuming the property value supports the price.

If another buyer purchases the same $500,000 home with $25,000 down, that buyer begins with a smaller equity position.

But the second buyer may have chosen to preserve cash for emergency savings, renovations, investments or other financial priorities.

There isn't one universally correct down-payment percentage.

The better question is what down-payment strategy makes sense for your finances.

Why Home Equity Matters for Refinancing

Equity can also matter when homeowners explore refinancing.

The amount of equity in a property can influence available refinance options, loan-to-value ratios and potentially other loan terms.

A homeowner considering refinancing should look at more than the new interest rate.

Closing costs, the new loan amount, the remaining term of the current mortgage and the expected time in the property should also be evaluated.

A refinance needs to make sense based on the complete financial picture.

Equity Can Also Matter for Mortgage Insurance

Depending on the type of mortgage, equity may eventually affect mortgage insurance requirements.

For certain conventional loans, private mortgage insurance may be eligible for cancellation once specific requirements are met.

The rules vary based on the mortgage, loan-to-value ratio, payment history, property value and applicable guidelines.

Homeowners shouldn't assume mortgage insurance automatically disappears whenever they believe they have enough equity.

If you have questions about an existing mortgage, review your loan documents and contact the appropriate mortgage servicer regarding the requirements that apply to your loan.

Home Equity Isn't the Same as Cash in the Bank

This is another important distinction.

If you have $200,000 of equity in your home, you don't have $200,000 sitting in an account ready to spend.

Equity is part of the property's value.

To convert it into usable cash, you generally need to sell the home or potentially use an eligible borrowing option secured by the property.

Those options have costs and risks.

Homeowners shouldn't treat equity as free money.

Borrowing against a home creates debt secured by the property, and selling the home involves transaction expenses.

The strength of home equity is that it provides homeowners with financial flexibility—not that it should automatically be spent.

Equity Can Provide Protection During a Housing Downturn

One of the most valuable benefits of equity is the financial cushion it can provide if home values decline.

Suppose a homeowner owes $450,000 on a property worth $500,000.

That homeowner has approximately $50,000 in gross equity.

A meaningful decline in the property's value could erase much of that cushion.

Now consider a homeowner who owes $200,000 on a $500,000 property.

A similar percentage decline in value would still leave that homeowner with substantial equity.

That's one reason the high share of equity-rich properties is significant for the broader housing market.

Millions of homeowners have a cushion between what they owe and what their homes are worth.

Why the Declining Equity-Rich Percentage Is Still Worth Watching

ATTOM CEO Rob Barber noted that both the equity-rich and seriously underwater measures remain healthier than they were before 2020 but have been moving in a less favorable direction over the past year.

That's a balanced way to look at the data.

There's no reason to ignore the decline from 47.4% equity-rich a year ago to 41.1% today.

It's meaningful.

At the same time, it's equally misleading to interpret the decline as evidence that homeowner equity has disappeared.

The housing market is transitioning from an extraordinary period of rapid appreciation toward more normalized conditions.

That normalization naturally affects equity statistics.

What This Means for New Jersey Homeowners

Many New Jersey homeowners experienced substantial appreciation over the past several years.

For homeowners in South Jersey, including Williamstown, Washington Township, Sewell, Blackwood, Cherry Hill and surrounding communities, the amount of equity accumulated may be considerably greater than they realize—particularly if they purchased before the large pandemic-era run-up in home values.

That could matter if they're considering selling and purchasing another home.

Instead of simply asking what today's mortgage rate is, the first step may be determining:

What could the current home realistically sell for?

What is the current mortgage payoff?

Approximately how much could be available from the sale?

How much would you want to put toward the next home?

What would the new mortgage payment look like?

Those questions can provide a much clearer picture of whether a move is financially realistic.

Pennsylvania Homeowners May Have Similar Opportunities

Homeowners in Pennsylvania, particularly those who have owned properties for several years, may also have significant accumulated equity.

Housing conditions vary widely between Philadelphia, its suburbs and other parts of Pennsylvania, so the numbers need to be evaluated locally.

But equity can be an important part of the move-up calculation.

A homeowner who looks only at today's mortgage rates may conclude moving doesn't make sense.

Once the equity from the current home is included, the picture may look different.

Delaware Homeowners Should Run the Numbers Too

The same applies in Delaware.

Whether you're considering moving within the state, relocating closer to the coast, downsizing or moving into a larger property, your current home's equity may be one of the most important components of your next purchase.

Before assuming you can't afford to move, determine what your current property and mortgage position actually look like.

Florida Equity Can Vary Considerably by Market

Florida deserves special attention because housing conditions can vary dramatically by metro area and property type.

Some homeowners benefited from rapid appreciation during the pandemic-era migration to Florida.

More recently, certain Florida markets have experienced increased inventory, slower price growth or other changes.

Insurance costs, condominium expenses and HOA fees can also influence property values and buyer demand.

That makes it especially important for Florida homeowners to use realistic current property values rather than assuming a home is still worth whatever it may have been at the peak of a particularly strong market.

Thinking About Selling and Buying Another Home?

If you own a home and are considering moving, you don't need to guess whether your equity makes the next purchase possible.

We can work through the financing side of the equation.

You'll want to estimate what your current property may sell for and obtain an approximate mortgage payoff.

From there, we can model different scenarios.

What happens if you put $100,000 down on the next home?

What happens with $150,000?

Would putting more down make sense, or would preserving some cash be preferable?

What does the payment look like at several different purchase prices?

Once those numbers are visible, the decision becomes much easier to evaluate.

Homebuyers Should Think Long Term

The latest equity statistics also provide a useful lesson for today's buyers.

It's easy to focus on what a home costs today.

But homeownership is generally a long-term financial decision.

If you purchase a home and remain there for years, your mortgage balance may gradually decline.

Property values may also change over that period.

Nobody can guarantee future appreciation, and buyers shouldn't purchase a home assuming they'll make a specific profit.

But the mechanics of a traditional mortgage allow homeowners to gradually increase their ownership stake as principal is repaid.

That's one reason buying a home can play such an important role in long-term financial planning.

Don't Wait for a Perfect Housing Market

There is always a reason someone can find to postpone buying.

Mortgage rates could be lower.

Home prices could be lower.

There could be more inventory.

Economic conditions could be clearer.

But there's rarely a moment when every housing-market variable is perfect simultaneously.

The better approach is determining whether buying makes sense based on your own finances.

Can you comfortably afford the payment?

Do you have sufficient cash?

Is your employment stable?

Does the property meet your needs?

Do you expect to remain in the home for an appropriate period?

Those questions matter more than trying to perfectly time the market.

Start With the Mortgage Numbers

Whether you're a first-time homebuyer or a homeowner with significant equity planning your next move, good decisions start with knowing the numbers.

If you're purchasing your first home, we can review mortgage programs, down-payment options, estimated closing costs and monthly payments.

If you already own a home, we can incorporate the potential proceeds from your current property and compare different down-payment strategies for the next purchase.

You may discover that you've built more buying power through home equity than you realized.

Or the analysis may show that waiting is the better choice.

Either way, you'll be making that decision based on actual numbers rather than assumptions.

More Than 40% of Homes Being Equity-Rich Is Still Significant

The headline number is worth remembering.

41.1% of mortgaged residential properties in America were equity-rich during the second quarter of 2026.

That's lower than a year ago, and the trend deserves attention.

But it also means millions of homeowners continue to have substantial ownership stakes in their homes.

For existing homeowners, that equity can potentially provide options when it's time to move.

For prospective buyers, today's numbers demonstrate one of the long-term financial characteristics of homeownership: as a mortgage balance is reduced and a home's value changes over time, homeowners can build an increasingly larger stake in the property.

If you're considering buying your first home, selling and moving up, downsizing, relocating, or purchasing another property in New Jersey, Pennsylvania, Delaware or Florida, let's look at the mortgage side before making assumptions about what is or isn't possible.

Understanding your current equity, potential down payment and estimated new monthly payment can turn a complicated housing decision into a much clearer financial comparison.

Mortgage Mike – Michael DeSantoCrossCountry MortgageNMLS #1766709Licensed in New Jersey, Pennsylvania, Delaware and Florida