Number of "equity-rich" homes has declined

​Equity is the difference between what your house is worth and what you still owe on your mortgage. The real estate data firm ATTOM found that about 41% of mortgaged homes in the U.S. are “equity-rich.”

That is “where the borrower owes less than 50% of the value of the house on their mortgage,” said Rick Sharga, founder and CEO of the real estate market intelligence firm CJ Patrick.

The share of equity-rich homes is at its lowest point in almost five years, according to ATTOM. Why? Sharga said one reason is that home prices are starting to fall.

If your house’s value shrinks, your stake in it is worth less. Sharga said this is happening in “the Gulf Coast States — Florida, Louisiana, Texas.”

​Plus, more people are borrowing against the equity they’ve built up.

People might be using the money to remodel, or even “extend their budget a little bit in the face of high prices at the grocery store and at the pump,” said Matt Schulz, chief consumer finance analyst at LendingTree.

​ATTOM also said the number of people underwater — owing more on their mortgages than their homes are worth — has edged up to around 3%. That’s higher than last year at this time but historically low.

Still, Susan Wachter, real estate professor at the University of Pennsylvania, is watching these numbers.

“Home equity is a bulwark of households’ financial well-being,” she said, adding that’s why it’s worth keeping an eye on these trends.