An article written by Inman News.appearing in the April 8, 2015 edition of
The time bomb referred to in this article is the estimated 20% (1 in 5 of every home with a mortgage in the US representing some 10 million homes) that are “under-equitied”, making it difficult for their owners to sell after their children have grown or to re-finance in order to make needed improvements.
“The housing depression created a new underclass of homeowners who cannot sell or refinance for two reasons. Because they owe more on their homes than they are worth. Or because they are above water but don’t have enough positive equity to cover the costs of selling or the 20 percent positive equity lenders require to refinance.”
Click below to read the full article and to understand what this means to the overall real estate market: