According to Zillow‘s 2017 Q4 Negative Equity Report, the share of homeowners who owe more than the value of their home is 9.1%, falling below 10% for the first time since the housing market fell in 2008.
Nonetheless, 4.4 million homeowners remain underwater, and about 713,000 of them owe at least twice as much as their homes are worth.
“For much of the country, the Great Recession is an increasingly distant memory – the American economy is booming once again, and markets are now shifting their gaze to future downturn risks,” says Zillow senior economist Aaron Terrazas.
“But scattered in neighborhoods across the country, the legacy of the mid-2000s housing bubble and bust lingers among the millions of Americans still underwater on their mortgages, trapped in their homes with no easy options to regain equity other than waiting. Their struggles mean there are fewer homes on the market for home buyers today. In corners of the country where home values have been stagnant in recent years, recent home buyers can easily fall underwater, particularly those who buy with small down payments,” Terrazas notes.
Nationally, roughly one in seven homeowners with a mortgage (15.4%) has some equity in their home, but likely not enough to sell and comfortably use the proceeds for a down payment on another home. Including these homeowners with limited equity, the nation’s “effective” negative equity rate jumps to 24.6%.
