Toy house and calculator on table close-up; Shutterstock ID 200470286
Africa Studio Toy house and calculator on table close-up; Shutterstock ID 200470286

The number of home owners burdened by negative equity continued to fall in the fourth quarter, according to Zillow's Svenja Gudell.

After hitting a high of almost 16 million in the first quarter of 2012, the number of home owners who were underwater fell to just over 6 million homeowners in the fourth quarter of 2015, Additionally, the fourth quarter negative equity rate dropped 0.3 percentage points from the third quarter to 13.1 percent, which was the slowest pace in a year.

Despite the encouraging national numbers, some metros still have issues. In Las Vegas and Chicago, more than 20 percent of homeowners were underwater in the fourth quarter. Even with improvements, Gudell argues that negative equity will continue to be an issue into the future.

Even though the number of underwater homeowners has fallen significantly since the peak of the housing crisis, negative equity persists in many markets as it fell at its slowest pace in a year. Things are moving in the right direction, but some owners are still deeply underwater. As we move into the home shopping season, inventory is already low, and negative equity is keeping potential additional stock from becoming available.

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