Homeowners lost an average of $13,400 in equity in the past year and are now left with roughly $299,000 of home value they can borrow against, a new study from Cotality has found.
The average homeowner gained $25,000 of equity in 2023, followed by another $4,900 in 2024, Cotality said in its Homeowner Equity Report. This year, however, equity gains are starting to sputter and even fall in certain states.
Economists watching the housing market attributed the drop in equity partly to the most recent batch of homebuyers and their mortgages.
"The decline in overall home equity came about mainly because of the growing number of people who took out low-down payment loans very recently to buy homes in parts of the country where home prices have been soft, including Sun Belt markets such as Austin and Dallas," said Brad Case, chief residential economist for Homes.com.
Cotality data suggested that homeowners across New England led the nation in home equity gains between the third quarter of 2024 and the third quarter of 2025:
| State | Average equity gain |
| Connecticut | $31,500 |
| Maine | $14,100 |
| Massachusetts | $16,000 |
| New Hampshire | $8,500 |
| Rhode Island | $16,200 |
| Vermont | Data not available |
Source: Cotality
New Jersey saw its average equity rise by $27,500, while neighboring New York experienced a more modest gain of $2,200.
Homeowners in Florida, Washington, D.C., and California saw the steepest equity losses — at $37,400, $35,500, and $32,500, respectively. Homeowners in Washington state, Hawaii, and Texas also saw dips of $32,100, $29,400, and $26,300, respectively.
'Negative equity is on the rise'
Selma Hepp, Cotality's chief economist, echoed Case's reasoning and said there's "a clear shift in equity trends" falling from their peak during the COVID-19 pandemic.
"Negative equity is on the rise, driven in part by affordability challenges that have led many first-time and lower-income buyers to over-leverage through piggyback loans or minimal down payments," Hepp said in a statement. "While overall home equity remains elevated, recent purchasers with smaller down payments may now face negative equity."
Negative equity is Cotality's way of saying a homeowner owes more money on the remaining balance of the home loan than the property is actually worth. Some also refer to this as being "underwater" or "upside down" on a home. Cotality reported that an additional 216,000 homes fell into negative equity territory in the third quarter — bringing the national total to 1.2 million.
Cotality tapped public property records databases nationwide and found the remaining balance figures for more than 50 million mortgages to create its quarterly report. The company said it purposely excluded Vermont because the state didn't have enough available data to support an analysis.
Homeowners can tap the equity in their house to apply for a home equity line of credit, or HELOC, loan.
Cotality researchers noted that "many homeowners are still flush with stored home equity."
The nation's homeowner equity reached a peak of $17.7 trillion in mid-2024; however, the figure has fluctuated between $17 trillion and $17.6 trillion this year.