You have reached your limit of free articles this month.

Enjoy unlimited access to SpringfieldNewsSun.com

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and interactive features. Starting at just 99c for 8 weeks.

X

Welcome to SpringfieldNewsSun.com

Your source for Clark and Champaign counties’ hometown news. All readers have free access to a limited number of stories every month.

If you are a News-Sun subscriber, please take a moment to login for unlimited access.

Housing debt still traps 10 million Americans


JOSH BOAK, AP Economics Writer

WASHINGTON (AP) — Nearly 10 million Americans remain financially trapped by homes worth less than their mortgage debts — an enduring drag on the U.S. economy almost seven years after the housing bust triggered the Great Recession.

During the first three months of this year, 18.8 percent of homeowners with a mortgage — 9.7 million — owed more on their loans than their properties would sell for, according to online real estate database Zillow. Though that was an improvement from the 25.4 percent figure of a year ago, the share of such “underwater” homeowners is about four times the historic average.

An additional 18.1 percent of mortgage holders were “effectively” underwater: They had equity, but the proceeds from selling their home would be too low to recoup the sales costs and also put a down payment on a new property.

The consequence is that few Americans are putting their homes on the market, thereby limiting the economic growth made possible by sales. Because of the shortage of homes being listed, bidding wars have inflated prices in parts of the country to levels that squeeze out many first-time and middle class buyers.

The problem is most pronounced among starter homes with prices averaging around $100,000, 30.2 percent of whose owners are burdened by underwater mortgages, sometimes called negative equity.

“The unfortunate reality is that housing markets look to be swimming with underwater borrowers for years to come,” said Stan Humphries, chief economist at Zillow.

The share of mortgage holders with negative equity is projected to drop to 17 percent at the start of next year, according to Zillow.

Several major U.S. metro areas are stuck with residents who have high rates of negative equity. In Chicago, almost 45 percent are underwater or effectively underwater. The rate is 53.1 percent in Atlanta, 50.6 percent in Las Vegas, 46.6 percent in Charlotte, 44 percent in St. Louis, and 43.2 percent in Tampa.


Reader Comments ...


Next Up in Business

Speedway to hire 1,000 workers across 9 states
Speedway to hire 1,000 workers across 9 states

Speedway will hire 1,000 workers in nine Midwest states and will host open interviews at each of its stores in the region later this month. The convenience store chain, with a headquarters in Enon, will host open interviews from 11 a.m. to 3 p.m. Wednesday, Jan. 25 at every one of its stores in nine states, according to information from the company...
Holiday debt blues? Here’s help getting on track
Holiday debt blues? Here’s help getting on track

John North is president of the Dayton Better Business Bureau. With the holidays behind you, the new year is a great time to get your finances back on track if you’ve slipped a bit. By dedicating yourself to using credit responsibly and sticking to a sensible plan, then you can effectively pay down your debt. According to debt.org, total U.S....
New shopping center proposed at long-vacant Springfield site
New shopping center proposed at long-vacant Springfield site

A new retail development is likely coming to the east side of Springfield at a longtime vacant property, the first major commercial growth there in several years. The Springfield Board of Zoning Appeals approved Wednesday night a variance for the former Roberds site in the 3000 block of East Main Street. City documents filed by developer Springfield...
Gmail phishing scam may lead users to give up login info
Gmail phishing scam may lead users to give up login info

A new phishing scam is allowing hackers to gain access to unsuspecting Gmail users' accounts and target their login credentials, according to recent reports. Mark Maunder, CEO of security service Wordfence, described the scam in detail in a blog post, adding that it is also targeting other services beyond Gmail. Tech Times reported that the scam involves...
Millennials spend more on coffee, save less for retirement
Millennials spend more on coffee, save less for retirement

A large number of Millennials spent more on coffee in the past year than they invested in their retirement savings, according to a new study. » RELATED: What makes Millennials tick in the workplace? It may surprise you About 41 percent of the Millennials — ages 18 to 35 — admitted to spending more on coffee than they saved for retirement...
More Stories