fbpx

How Underwater Homes Affect the Housing Market

The percentage of homeowners who owe more on their mortgages than their homes are worth (called “negative equity”) continues to cloud the Las Vegas housing market, even though more underwater homeowners are surfacing all the time.

Abnormally high rates of negative equity are hard on homeowners who can’t sell or refinance, but high negative equity rates also affect whole communities. All homes sell more slowly in areas with a high negative equity rate.

The homes most likely to be underwater are entry-level properties, restricting supply and making it hard to buy a home in those markets, as well.

Luckily, there has been some improvement nationally. In 2015, over 13 percent of homeowners with a mortgage were upside down. In 2014, it was almost 17 percent.

Las Vegas has topped the list of cities with the highest percentage of underwater homeowners for the last four and a half years. In 2015, an estimated 22.1 percent of Las Vegas homeowners had negative equity in their homes.