The share of homeowners underwater on their mortgage dipped below 10 percent for the first time since the 2008 economic crash, a new report from Zillow finds. Precipitously rising home values are helping those who hung on through the crash regain equity. 

The share of homeowners underwater on their mortgage dipped below 10 percent for the first time since the 2008 economic crash, a new report from Zillow finds. Persistently rising home values are helping those who hung on through the crash regain equity. 

“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,” said Zillow senior economist Aaron Terrazas.

While the national rate of owners underwater on their mortgage — defined here as a homeowner owing more than their home is worth — stands at only 9.1 percent, in some areas the pains of the recession are still being felt.

In Virginia Beach, more than 16 percent of homeowners are underwater, and in Chicago, more than 15 percent are underwater. Philadelphia, Detroit, Washington, D.C., Cleveland and Baltimore all still have rates above 10 percent.

“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,” Terrazas said. “Their struggles mean there are fewer homes on the market for homebuyers today. 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 down payments.”

Underwater homeowners in Detroit are still the furthest from regaining positive equity in their homes. More than a quarter of the homeowners underwater in Detroit owe more than double the value of their home, while the city is trying to address the problem of abandoned homes under a public reclamation and renovation program. Nationally, 16.3 percent of homeowners with negative equity owe more than double the value of their home.

The average U.S. home lost more than a quarter of its value during the recession, but as home values continue to climb, those who were able to hold onto their homes throughout the crisis have begun to resurface on their mortgages.

Nationally, 15.4 percent of homeowners have some equity in their home, but the report says it’s likely not enough to sell and comfortably use the proceeds for a down payment on a new home.

Email Patrick Kearns

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×