46% of US Homeowners with a Mortgage are Frozen and Can’t Afford to Move

Was looking at some data from Zillow that indicates about 17% of US homes with a mortgage remain under water:

LTV dist of US homeowners with mort
Click on images for full size. Source: Zillow

Bad enough but the reality is that a much larger portion are effectively frozen in their homes: They can’t sell and net enough money to make the downpayment on a similar size home, forget about actually moving up:

46% of US homeowners with a mortgage can't sell and buy another home of similar price

That’s more than 46% or about 22 million homeowners who can’t sell their current home, pay off the mortgage and the costs of selling the house with enough left over to make the 20% downpayment on another home of the same price. Not to mention the cost of moving & storage either.

But wait, there’s more- If you look at starter homes, typically in the lower tier of home prices the number goes up to 56%

56% of starter homes are frozen. Owners can't sell and move up.

In this chart I blanked out the middle and upper tiers to focus on the starter home range. What you see is that 56% of the homes in that tier are frozen which hurts two ways; their owners can’t sell and move up and first time homeowners can’t find a starter home to buy (and that’s just for the shrinking percentage of people willing to take on a thirty year financial obligation which ties them to a specific market).

Sadly the trend is not heading the right direction, the percent of frozen homeowners is up since year end. That’s good for apartment building investors but… The Zillow article Even as Home Values Rise, Negative Equity Rate Flattens has additional interactive charts so that you can see the breakdowns by county and in the 100 largest markets around the US.

Good hunting-

One thought on “46% of US Homeowners with a Mortgage are Frozen and Can’t Afford to Move”

  1. Disturbing look at what many Americans are having to go through. So many people are stuck where they are because they can’t afford a better, or even similarly sized, home. Here’s hoping attention to this problem can help find a resolution.

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