SEATTLE—Slightly more than 13 million homeowners with a mortgage were in negative equity, or underwater, at the end of the first quarter, owing more on their mortgage than their home is worth. This brings the national negative equity rate, according to the Zillow Negative Equity Report, to 25.4 percent of all homeowners with a mortgage. Another 18.2 percent of homeowners with mortgages, while not considered underwater, likely do not have enough equity to afford to move.
“Looking at the effective negative equity rate could explain why recent, healthy declines in the number of underwater borrowers haven’t yet translated into more homes for sale,” said Zillow Chief Economist Dr. Stan Humphries. “The only cure is patience, as rising home values continue to build equity to the point where more homeowners can realistically sell.”
The Zillow Negative Equity Report does predict that the negative equity rate among all homeowners with a mortgage will fall to 23.5 percent by the first quarter of 2014, lifting more than 1.4 million homeowners nationwide into positive equity. At present, the largest metro areas with the highest effective negative equity rate, including homeowners with 20 percent equity or less, include Las Vegas (71.5 percent); Atlanta (64.1 percent); and Riverside, Calif. (59.7 percent).
The complete listing for metro areas and more information about the Zillow Negative Equity Report can be found here.