The total value of residential real estate in the United States recorded a slight decline in the third quarter, but it remains at elevated levels, according to the latest data released by the Federal Reserve.
The total market value of all owner-occupied homes in the United States fell by $361 billion to just over $48 trillion in the third quarter of 2025. Despite this decline, the figure remains high compared with levels recorded in 2024, based on the Federal Reserve’s Z.1 Financial Accounts report.
The data indicate a slight decrease in the share of homeowners’ equity in residential properties, which reached 71.6%, compared with 72% in the second quarter of the same year. It is worth noting that this level is almost the same as in the first quarter.
According to Jake Krimmel, chief economist at Realtor.com®, the modest decline recorded in the Case-Shiller Home Price Index during the third quarter is one of the reasons behind this drop. Krimmel also expects total property values to remain largely stable over the current year, with an anticipated annual increase in home prices of 2.2%, accompanied by a slight decline in the homeownership rate.
This expected 2% increase in home prices for 2025 is slightly lower than the growth rate recorded in that year, and inflation is likely to offset the anticipated rise in home prices in 2026, which could lead to a slight decline in real property values, according to Realtor.com’s housing market outlook for 2026.
Krimmel explained that despite expectations of a 2.2% increase in home prices, the homeownership rate may see a slight decline. He added that national-level property values may remain flat in 2026, while local real estate market dynamics could vary.
Forecasts also point to a 1.7% increase in existing home sales to 4.13 million units, while housing inventory for sale is expected to rebound by 9%. This improvement in supply could help lift sales above the low levels expected in 2025, which have been described as the lowest in three decades.
On the other hand, household debt rose by 4.1% in the third quarter, compared with growth of 3.9% in the previous quarter. Mortgage debt in particular recorded a notable increase of $108 billion during the same period.
