Analysis Finds Tri-Cities Home Equity Erodes

By DON FENLEY

The nine-county Tri-Cities region entered 2026 with more mortgaged homes than a year ago,  and with a measurably weaker equity picture across virtually every county.

According to ATTOM Data Solutions’ first quarter 2026 U.S. Home Equity & Underwater Report, total outstanding mortgages in the Tri-Cities reached 107,422 in Q1, up from 105,175 last year. That’s a 2,247-mortgage gain (2.1%). It reflects continued growth in the region’s financed housing stock, even as the equity profile of those loans has deteriorated.

Equity-rich properties fell to 52.4% from 57.3% a year earlier. In raw terms, that means roughly 4,050 fewer homeowners held a loan-to-value ratio at or below 50%. At the same time, the seriously underwater rate – properties where loan balances exceed estimated market value by at least 25% – added approximately 841 households to the distressed category.

The trend line is unambiguous. Every county in the region posted a decline in equity-rich rates. Most posted increases in seriously underwater rates.

That said, the Tri-Cities continues to outperform national benchmarks on the equity side. Nationally, ATTOM found that 43.3% of mortgaged residential properties were equity-rich in Q1 2026, the lowest rate since Q4 2021 and down from 44.6% the prior quarter. The Tri-Cities’ 52.4% remains roughly nine percentage points above the national figure, a meaningful cushion that reflects the region’s relatively affordable home prices and the equity built up during the pandemic-era appreciation run.

The seriously underwater comparison is less favorable. The Tri-Cities’ 3.2% underwater rate now matches the national rate exactly, up from a 0.3-percentage-point advantage a year ago when the region posted 2.5% against the nation’s 2.8%.

“Homeowner equity remains relatively strong overall, but we’re seeing signs of moderation,” according to the ATTOM analysis.”As mortgage rates have risen and home prices have cooled, the share of equity-rich homes has declined in most markets while the rate of seriously underwater properties is edging up across much of the country.”

The Tri-Cities data fits that national framing precisely. The region’s equity buffer is compressing, not collapsing. But the margin against the national benchmark has narrowed, and with outstanding mortgages continuing to grow, the pool of properties exposed to future equity erosion is larger than it was a year ago.

What the Trends Mean

Taken together, the equity and underwater data tell a straightforward story about margin compression. A declining equity-rich rate means fewer homeowners have the financial cushion to absorb a job loss, an unexpected expense, or a forced sale without emerging whole. A rising seriously underwater rate means more homeowners are effectively locked in place — unable to sell without bringing cash to the closing table and cut off from refinancing as a relief valve.

Those conditions don’t automatically produce distress, but they raise the cost of financial shocks when they occur. That context matters in the Tri-Cities, where CoreData’s analysis of ATTOM data found foreclosure filings jumped 48.2% in Q1 2026 compared with a year ago. Eroding equity and rising foreclosure activity are mutually reinforcing: as the equity buffer thins, homeowners who encounter financial difficulty have fewer options short of default.

The counterweight is the region’s structural position. Sullivan and Washington counties in Tennessee ranked among the least vulnerable housing markets in the country in ATTOM’s Q4 2025 risk analysis, supported by income-relative affordability, equity built during the pandemic appreciation cycle, and stable employment. Those fundamentals haven’t disappeared — but the Q1 2026 equity data show they are no longer advancing. The region enters the second half of 2026 with a smaller margin for error than it had a year ago.