Homeowners Are Sitting on $34.7 Trillion in Equity—but Mortgage Debt Is Growing

Published by REALTOR.com | March 31, 2025

Home equity in the U.S. reached the third-highest level on record at the end of last year

In welcome news for homeowners braving a volatile housing market, home equity in the U.S.—the share of your property you actually own—reached the third-highest level on record at the end of last year, rising by more than $3 trillion.

The total value of owner-occupied real estate registered at a massive $48.1 trillion, making it the third-highest value on record, according to the Federal Reserve’s Flow of Funds data for the fourth quarter of 2024.

Home equity followed a similar trajectory, also reaching the third-highest value at $34.7 trillion—and offering homeowners some relief amid growing economic uncertainty, coupled with stubbornly high mortgage rates in the high 6% range.

“While not a record, today’s high home equity is an important cushion for homeowners and the economy, says Realtor.com® Chief Economist Danielle Hale.

For context, even if homes were to shed 10% of their value overnight, equity would still be at a respectable 69.5%, similar to the second half of 2021, according to Hale. Meanwhile, a sudden loss of 20% of value would reduce the equity to 65.6%.

Home values hover near record levels

From October to December 2024, the total value of owner-occupied real estate, or the market value of all homes owned by those living in them, shed $400 billion from the previous quarter’s high, settling at $48.1 trillion, according to a Realtor.com analysis of the Fed’s data.

This reflects a retreat from the highest total recorded earlier in 2024. But on the plus side, homes gained $3.2 trillion in value over the past year, highlighting the surge of the housing market over the past 10 years.

To put the data in a historical context, the total value of U.S. real estate in mid-2016 was less than half of what it was at the end of last year.

Mortgage debt soars to a new record high

Even as home values continued to grow, so did the mortgage debt, soaring to new a record high of $13.3 trillion.

This figure represents an increase of $100.5 billion from the previous quarter and $340.2 billion from the same period a year ago.

However, while mortgage debt has continued to go up year over year, the annual growth pace remained flat with the previous quarter at 2.6%, and it has slowed down since Q2.

Hale notes that the year-over-year growth in mortgage debt is in line with what was typical in 2017 to 2019, and less than half of the COVID-19 pandemic-era values seen from mid-2020 to mid-2023.

With rising mortgage debt and sliding real estate value, home equity saw a half-trillion-dollar plunge in the fourth quarter, based on the Fed’s report.

But it was not all doom and gloom, because equity still managed to add nearly $3.2 trillion over the past year, with the aggregate, or total, value held by U.S. homeowners hitting $34.7 million at the close of 2024.

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