Negative Equity Prevents Homeowners From Selling

As home prices and housing demands continue to rise, negative equity is preventing many homeowners from putting their homes on the market.

According to CNBC, about 5.4 percent of all mortgage properties are in a negative equity position, meaning owners owe more on the mortgage than their home is currently worth. The national aggregate of homeowners still needs to make up $284 billion to break even. This makes homeowners unable to sell their homes, contributing the the lack of housing stock.

"Given the strength of the job market, favorable demographics and rock-bottom mortgage interest rates that make buying a home very affordable, the existing home sales market should be roaring instead of whimpering," Svenja Gudell, Zillow's chief economist, wrote in reaction to the weak August home sales report from the [National Association of] Realtors. "All those factors that should be acting as tailwinds may all be present, but they're being overwhelmed by the simple fact that there are just very few homes actually available to buy."

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