Housing debt still traps 10 million Americans

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WASHINGTON (AP) -- Almost seven years after the housing bust triggered the Great Recession, nearly 10 million Americans remain financially trapped by homes that are worth less than their mortgage debts.

According to the online database Zillow, 18.8 percent of homeowners with a mortgage owed more on their loans than their properties would sell for during the first three months of the year. It's an improvement from the 25.4 percent figure of a year ago -- but the share of those "underwater" homeowners is still about four times the historic average.

An additional 18 percent of mortgage holders are "effectively" underwater. That means they have equity -- but the proceeds from selling their home would be too low to recoup the sales costs and also put a down payment on a new property.

As a result, fewer Americans are putting their homes on the market. And that is limiting the economic growth that would be made possible by sales.

Because of the shortage of homes being listed, bidding wars have inflated prices in parts of the country, to levels that are squeezing out many first-time and middle class buyers.

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