We aren’t talking about sea level rise: The challenges presented by the current housing market to first-time buyers have put many on a prolonged path to the American dream — even for a couple who has no debt, a dual-income household and more than $50,000 in savings.
There are a lot of places to lay blame, and it’s not just high rents. Many point to crushing student debt loads, but the real culprits, say experts, are the housing crisis and the Great Recession, which forced many Americans into foreclosure. Many who didn’t lose their homes found themselves with negative equity — owing more to their lender than a fair market price. This is commonly referred to as being underwater in a mortgage, and when homeowners feel like they are drowning, they tend to stay put. That leads to not enough affordable supply to meet the demand.
This chart from USA Today showcases the highest negative equity rates from the latter end of 2015:
The Tampa area has seen a bit of a bounce back lately however. Zillow recently ranked the Tampa Bay area the #2 market for first time home buyers. If this negative equity is still around, buyers are pressing through to keep the market churning.
If you are dealing with negative equity, SmartAsset.com provides a few solutions to help recover your equity position.