Nearly 10M Americans With 'Underwater' Mortgages

According to, 18% of homes with mortgages are now worth less than is owed to the bank.
4:24 | 05/20/14

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Transcript for Nearly 10M Americans With 'Underwater' Mortgages
You lose. It's Tuesday may twentieth the market to New -- -- open and today's big number is 9700000. That's how many mortgages in America are still under water the home's worth less than what is owed to the bank according to zillow dot com. Hello everyone I'm Michelle Franzen -- New York here with the details -- toll of Yahoo! finance might we haven't heard much about. Homes being underwater lately -- reminder though just how bad things are first millions of Americans. Yeah I mean the markets continues not to function. In a normal fashion when it comes to housing especially the lower end of the housing market. That's about 18%. Of all homes that actually have a mortgage on them. Are underwater and is another slug of homes that you know while there might technically be some equity in the home it's not enough. For people pay for the cost of moving so it creates a clog especially as they say and that in that lower end of the housing market -- -- first time buyers are more likely there. To be looking for a home. And it obviously it tells us that it's going to be a long time before. The housing recovery really feels like we're back to a point where we have kind of that normal functioning -- first time buyers get in move up buyers are able to move. And all the rest. And certainly a big number but according to zillow there -- also been slow improvement the situation peaked at nearly 32%. Of homes. In 2012. So slowly -- surely right. Well slowly but surely to this point the issue is you know investigators home prices have appreciated a lot obviously banks have become. A little bit better about about lending to those who can qualify. But with. Currently we've had this kind of stall in the housing recovery so prices are not moving up quite as rapidly and activity levels are low -- one -- -- results of this fact that a lot of people are kind of caught in their homes. Is that inventories of homes for sale is actually a very low levels historically so even though you've had this come back and prices and activity has picked up from very low levels. It still does not that much supply out there houses people can afford. And that's what we have -- -- this as I called a clogging the system. And how should we interpret that -- that you say that -- assistant also. Where's the situation worse what regions and areas are still suffering the most. Well one level the reason for the clog is that I know people even though the job market is improved. About wages and knock on a very much and affordability of homes has not gotten better -- basically stayed the same so you have people who can't afford. I think -- in terms of regionally those areas that really were hardest hit by the housing -- which -- the big boom towns. All of the ones that still have higher than normal percentage of homes. People are under water that's like Las Vegas Orlando Florida and other parts of Central Florida Atlanta's and other market that also had a lot of building. -- and you know kind of caught people in homes from their houses stop going up in value so. You know I don't think it's and it's a matter of being concerned that those areas are in for kind of a double dip. In terms of housing taking another downturn it's much more likely that. The market kind of limps along and we have to wait for that wage growth in the job market to improve enough. May be due to lift home nice little more and you mentioned the economy but also that goes hand in hand with the banks are -- loosening up their grip a little bit with. Giving out those loans more and will be enough to throw folks a lifeline. You don't banks have loosened up as much as they can or -- likely to give in the credit worthiness of those fires so if you if you actually have good credit. You're fighting the banks off. If you don't have good -- you don't have the collateral it's worth a lot because your home is underwater you can have the equity. Then they're just not mention what landing we basically put that you know most of the sub prime lending market. At a business. In the in the sort of post crisis period and therefore it's all about kind of more standard mortgages that that they want to be able to sell the Fannie Mae and Freddie Mac and those are the ones that are gonna have tighter restrictions and that's -- you have a mismatch between those big big number of people want to buy a home more or get out of their existing home. And the availability of those mortgages and of course for the weather and spring we'll have to wait and see what we what we find it. During summer -- Angela from Yahoo! finance thanks for joining us thank you of course can keep up with the latest headlines right here on You've been watching the big number I'm Michelle Franzen -- New York.

This transcript has been automatically generated and may not be 100% accurate.

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