Phoenix Q1 2026: equity + foreclosure data

[Jon Hegreness]

The "another 2008" thesis is back. Pulled the primary-source data this week. The structural setup is not 2008, but if you're investing in Arizona, there's a wrinkle.

National equity composition (Census ACS 2024 5-year, released Jan 2026):

- 39.4% of US owner-occupied homes are mortgage-free (~33-35M homes)

- Up from 34.4% a decade ago

Of mortgaged homes (ATTOM Q1 2026 Home Equity & Underwater Report):

- 43.3% equity-rich (LTV <=50%), down from 46.2% YoY (lowest since Q4 2021)

- 3.2% seriously underwater (LTV >=125%), up from 2.8% YoY

Combine those: ~2 of 3 US owners structurally strong. ATTOM's 2025 year-end was 367,460 filings, 87% below the 2010 peak of 2.9M.

If you're underwriting on a 2008-style price reset showing up in 2026-2027, the systemic data argues against that thesis. You'd need a credit-cycle-scale event, not the current rate-and-affordability cycle, to produce that unwind.

Arizona-specific (same ATTOM Q1 2026 report):

- AZ Q1 2026 foreclosure rate: 1 in 1,137 housing units. National: 1 in 3,131. ~3x national.

- AZ equity-rich share: 44.2% Q1 2026, down from 49.8% Q1 2025. 5.6-pt drop vs national 2.9-pt. AZ moderating ~2x faster.

For investors:

- Phoenix metro distressed-acquisition opportunities running higher per capita than national. Not crisis-level, but the supply funnel is wider here.

- AZ owner equity cushion thinner than national average and getting thinner faster. Owners who need to exit have less negotiating power than the national equivalent.

- Subject-to / novation / creative-finance deal math benefits from this trend.

- Flip math needs more conservative comps. 44.2% equity-rich is not a sellers-have-leverage market.

For 1031 investors: AZ equity-rich properties still numerous in absolute terms, but the relative-share decline argues for tighter identification windows.

Sources: Census ACS 2024 5-year (Jan 2026); ATTOM Q1 2026 U.S. Home Equity & Underwater Report (May 7, 2026); ATTOM Q1 + March 2026 Foreclosure Market Report; ATTOM April 2026 Foreclosure Market Report; ATTOM Year-End 2025 U.S. Foreclosure Market Report.