"After gaining $25,000 in 2023 and another $4,500 in 2024, recent equity gains have stalled. The pullback in equity levels resulted in an increase in the share of underwater homes those that are worth less than their mortgage balances. As of Q2 2025, the share of mortgaged homes with negative equity was 2%, up from 1.7% a year earlier. Cotality is forecasting a national home-price increase of 3% over the next year."
"Cotality chief economist Selma Hepp said that home-price appreciation in 2025 is at its slowest pace since 2008. But even in markets that have seen price declines, home equity levels remain at historically high levels. With the reduced pace of appreciation, seasonal fluctuations in home prices will have a pronounced impact on equity changes, Hepp said. Recent declines also highlight the benefits of accessible equity as some homeowners leverage their equity for alternative financial purposes."
Home equity gains stalled after large increases in 2023 and 2024, causing a modest rise in negative equity from 1.7% to 2% of mortgaged homes by Q2 2025. National home prices are forecast to rise about 3% over the next year, a much slower pace than recent years. A 5% price increase would return equity to about 144,000 properties, while a 5% decline would push roughly 242,000 properties underwater. Home-price appreciation in 2025 is the slowest since 2008, yet average equity balances remain historically high in many markets. Regional results varied, with Northeast and certain Midwest states posting gains while other areas saw declines.
Read at www.housingwire.com
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