Housing equity remains powerful buffer for mortgaged homeowners

Housing wealth among mortgage borrowers climbed to $17.9 trillion in the first quarter, according to updated figures published by Cotality on Thursday.

That represents a net equity gain of $206.6 billion, or 1.2%, from the fourth quarter, and slightly more than half of the roughly $34 trillion of total homeowner equity at the end of March, the real estate analytics firm said in its latest Homeowner Equity Insights Report.

Despite years of rising living costs and softening home price gains in many parts of the country, U.S. consumers with mortgages are resting on financial cushions worth an average of $310,500, a figure Cotality reached by dividing mortgaged homeowner equity by the roughly 57.6 million mortgaged residences across the country.

“This large store of housing wealth continues to support household net worth, but it also keeps many homeowners handcuffed and contributes to a slower-moving housing market,” Selma Hepp, chief economist at Cotality, commented in the report.

Borrowers can typically only access that equity through home equity loan products or by selling their house. The impact of regional variations in accumulated equity become particularly stark when sellers who capture more equity in pricier markets deploy it through repurchasing in less expensive areas.

The average mortgaged borrower in California, for example, held $626,900 in home equity at the end of the first quarter, well above the national median home price of $342,200, according to Cotality data. That equity buffer is “mathematically large enough to purchase a median-priced home entirely in cash in 48 out of 50 states,” the report said.

Homeowner equity is very divided on a state-by-state basis, with borrowers in the West and Northeast holding the largest amounts of equity.

Hawaii homeowners have the highest average equity per borrower at $688,000, followed by California at $626,900, Massachusetts at $479,600, Washington at $441,000 and New York at $433,000. Borrowers in Louisiana, Oklahoma and Iowa had the least average equity at $114,700, $123,900 and $124,300, respectively.

Variations in regional pricing trends also influenced where the largest annual growth in equity occurred in the first quarter.

New York homeowners posted the largest year-over-year equity gain by dollar volume, adding $40,000 on average, compared to the next highest growth states of New Jersey, at an average of $34,000, and Connecticut, at $33,000. Hawaii homeowners posted an average equity decline of $11,000, the most of any state, followed by respective $7,000 average declines in Florida and Colorado.

Home prices would ultimately have to fall precipitously and unexpectedly, said Cotality, to raise concerns about risks from borrowers in negative equity, a situation where any mortgage balances securing a property exceed what that property could fetch in a sale.

Describing negative equity in the report as a “near-obsolete concern,” Cotality reported that the total number of underwater properties declined by 106,000 properties, or 9%, from the first quarter of 2025, leaving just 1.9% of all mortgaged properties in negative equity.