While the national negative equity rate fell by 0.3 percentage points in the fourth quarter of 2015, and the past four years have seen about 10 million homeowners recover from negative equity, there are still 6 million homeowners underwater, according to Zillow. Of this 6 million, about 820,000 homeowners owe the bank twice what their homes are worth. It may be nearly impossible for many of these individuals to ever recover enough to sell or refinance.
At the end of 2015, across the country, about 13 percent of everyone with a mortgage found themselves with negative equity. However, a few metros were far below the national levels of 13 percent.
San Jose, for example, only has 2.8 percent of homeowners that owe more than their mortgage and Denver sits at about 5.5 percent. While there are fewer homeowners with negative equity across the country, it fell to its slowest pace in a year.
With inventory already low, especially while heading into the spring selling season, the negative equity many homeowners are facing is preventing them from selling--and adding much needed stock to the market.