Home Equity Decreases Nationally at the End of 2025

Home Equity Just Took a Hit: What Smart Investors Need to See Now

According to the latestCotality Homeowner Equity Report (HER), homeowner equity in the U.S. declined modestly in Q4 2025, reflecting slower home price growth. Total borrower equity fell by $78.8 billion (0.5%) year over year, with the average homeowner losing about $8,500, though still holding roughly $295,000 in equity. Overall equity remains historically high at nearly $17 trillion. Negative equity rose, affecting about 1.2 million homes (2.2% of mortgaged properties), up both quarterly and annually. Cotality says regional differences persist, with gains in states like New Jersey and losses in Florida and California. While modest price growth is expected, weaker housing or labor markets could pressure equity, especially for recent buyers with limited financial cushions.

“As home price growth has slowed, homeowner equity has largely leveled off, but it remains historically high. Existing mortgage borrowers still control nearly $17 trillion in total equity, with roughly $11 trillion that could be tapped, and those figures have held remarkably steady over the past year. And while borrowers have been relatively timid in tapping the equity, declining borrowing rates could make tapping home equity relatively more affordable in the future.” Said Cotality Chief Economist Dr. Selma Hepp.