According to the latest report from real estate data firm ATTOM, the decrease in equity-rich homes—defined as properties where loan balances total no more than half the market value—reflects a tightening market compared to the 47.4 percent recorded in the second quarter of 2025. While the national rate of seriously underwater homes held at 3.2 percent for the quarter, this figure represents an increase from the 2.7 percent observed at this time last year.

ATTOM CEO Rob Barber noted that while these metrics remain stronger than pre-2020 levels, the consistent downward shift in equity strength warrants close attention. Regional disparities remain stark; Minnesota, for instance, experienced a significant surge in seriously underwater properties, jumping from 2.6 percent to 12.1 percent annually. Conversely, states like Vermont continue to lead in equity-rich housing, with 78.9 percent of mortgaged properties meeting the criteria. Metropolitan areas face similar pressures, with 104 out of 108 analyzed markets reporting a year-over-year decline in the share of equity-rich homes.