Short List

Head Above Water

Less than 20 percent of all homeowners with a mortgage were in negative equity, or “underwater,” in the second quarter, according to a recent report from Zillow. While 8.7 million homeowners still do find themselves owing more on their mortgage than their home is worth, the rate of negative equity is expected to fall to 14.9 percent by the second quarter of next year, Zillow projects.

Negative equity has fallen for nine consecutive quarters as the housing market has recovered and home values have risen. The effective negative equity rate, including those homeowners with 20 percent or less equity in their homes, is 34.8 percent. While approximately one-third of all homeowners do not have a mortgage and own their homes outright, 11.9 percent of all homeowners are in negative equity.

Generational factors play a role in who is underwater: 19.6 percent of millennial homeowners with a mortgage are underwater, compared to 18.7 percent of Generation X homeowners and 10.9 percent of baby boomers.