Nearly 20% of Americans Owe More on a Mortgage Than Their Home is Worth

Joe Shlabotnik / Foter / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

Recently, the online real estate database Zillow published statistics indicating that Americans owe more on their mortgage loans than their property is actually worth, if they try to sell it today.

Some 10 million Americans, or 18.8 % of homeowners with a mortgage are financially trapped with devalued homes. Despite the fact that the percentage is down from a year ago (25.4%), the number of such “underwater” homeowners is four times higher than the historic average.

Experts say that such trend has a negative effect on the U.S. economy, even seven years after the housing bust started the recession.

Even worse, another 18.1% of mortgage holders had equity, but had they decided to sell, the profits would have been way to low to make up for the sales costs and for a down payment on a new home.

As a result, many Americans refrain from putting their homes on the market and the shortage of listed homes inflates the prices in some parts of the country, making it for many first-time buyers hard to afford a new home.

Read the full story at Fox News.