Millions of American Homeowners Are Still Reeling From the Housing Crisis

August 18, 2016, 8:46 PM UTC
March Existing Home Sales Drop Three Percent
A sign advertises a bank-owned house for sale on April 23, 2009 in Pasadena, California. About half of all homes sold last month were sold to first-time homebuyers but hopes of a Spring recovery in the housing market were dampened by a report by the National Association of Realtors that existing home sales fell 3 percent in March despite near-record-low mortgage rates and home prices that are the lowest in years. The median sales price in March was $175,200, down from $200,000 a year ago.
Photograph by David McNew — Getty Images

It’s been five years since America’s housing crisis officially ended, but nearly six million American homeowners still underwater on their mortgages, a new report finds.

It’s called the negative equity rate — the percentage of Americans whose houses are worth less than the outstanding debt on their mortgage. At the peak of the housing crisis, more than 30% of American homes were considered underwater. Today that number has dropped to 12% — 5.9 million Americans — which is still well above what’s considered normal, according to a CNBC report.

“At its worst, negative equity touched all kinds of homeowners in all kinds of markets,” Zillow (Z) chief economist Svenja Gudell told CNBC. “The type of community a given home was in — urban or suburban — mattered little. Fast-forward a few years, and the relative vibrancy of a given community and how it has performed over the past few years, and not necessarily its location in the city or suburbs, matters a great deal.”

The cities with the worst negative equity rate are Chicago and Las Vegas, but the rate also remains high in Cleveland and Kansas City, the report says.

New home sales rose 3.5% in June and were up 25.4% from the same time last year, according to the U.S. Census. Home prices reached pre-bubble rates as recently as December despite sporadic sales rates throughout the year so far.