For the first time since the Great Recession, the share of homeowners who owe more than the value of their homes is below 10 percent, according to Zillow’s Negative Equity Report
covering the fourth quarter of 2017.
Zillow recorded a 9.1 percent share of underwater homeowners in the final quarter of last year, or 4.4 million homeowners. Approximately 713,000 of these homeowners owe at least twice as much as their homes’ value.
Approximately one in seven homeowners with a mortgage, or 15.4 percent, have some equity in their home, but likely not enough to sell and comfortably use the proceeds for a downpayment on another home. Zillow added that underwater homeowners are contributing to the ongoing housing inventory shortage by holding on to their homes instead of selling for a loss.
“Their struggles mean there are fewer homes on the market for homebuyers today,” complained Zillow Senior Economist Aaron Terrazas. “In corners of the country where home values have been stagnant in recent years, recent homebuyers can easily fall underwater, particularly those who buy with small downpayments.”