Two Equity Numbers Moving in Opposite Directions
ATTOM defines "equity-rich" as a mortgaged property where the combined loan balance is 50% or less of the home’s estimated market value, and "seriously underwater" as the opposite extreme, where the combined loan balance is at least 125% of that value. In the first quarter of 2026, 43.3% of mortgaged US residential properties qualified as equity-rich, down from 44.6% in the fourth quarter of 2025 and the lowest share recorded since the fourth quarter of 2021.
The underwater share moved the other way over the same stretch. Seriously underwater properties reached 3.2% of mortgaged homes in the first quarter of 2026, up from 3.0% the prior quarter and 2.8% a year earlier. Neither shift is dramatic on its own, but two consecutive quarters of the equity-rich share falling while the underwater share rises is the kind of pattern that shows up before it shows up anywhere else, in the cushion homeowners have left.
What a Thinner Equity Cushion Means for Who Is Willing to Sell
An equity-rich owner has options a thin-equity owner does not. They can list at a discount and still walk away with cash, carry seller financing without much risk, or sit tight through a slow market. An owner with 3.2% underwater math has none of those choices; a sale at anything below the loan balance means bringing money to closing, which is exactly the position that turns a routine life event, a job loss, a divorce, a health bill, into a forced decision rather than a preference.
That is the population showing up in the foreclosure numbers now. US foreclosure filings reached 227,548 properties in the first half of 2026, up 21% year over year, and a homeowner with a thinning equity position has fewer ways to avoid that outcome than one did even a year earlier. Reaching that owner before the lender does is a matter of finding them, and that is the job VA Horizon’s trained callers handle at volume: working the lists where this exact equity math is already playing out, with an in-house SDR qualifying every seller who calls back.
The Numbers
43.3% of mortgaged US residential properties were equity-rich (loan balance 50% or less of market value) in Q1 2026, down from 44.6% in Q4 2025, the lowest equity-rich share since Q4 2021.
3.2% of mortgaged US residential properties were seriously underwater (loan balance at least 125% of market value) in Q1 2026, up from 3.0% in Q4 2025 and 2.8% in Q1 2025.
US foreclosure filings reached 227,548 properties in the first half of 2026, up 21% year over year, the population most likely to include owners whose equity cushion has already run out.
Sources
The external data in this article draws on the sources below. Figures described in the text as estimates or industry triangulations are directional and are not attributed to a single dataset.