Home prices slowed down dramatically in 2014, but still made enough gains to give U.S. homeowners a collective $1.7 trillion in additional home equity, according to real estate company Zillow.
Some tapped that immediately, taking out home equity lines of credit. In fact, that was the fastest growing segment of the mortgage market.
Others, many of whom came up from under water on their mortgages, decided to sell. Inventory is up nearly 12 percent from a year ago. Seven million borrowers have escaped negative equity since 2012, either through foreclosure, short sale, paying down debt or home price appreciation; nearly 9 million are still drowning in housing debt, according to Zillow.
"Looking at negative equity helps us understand so many of the currently out-of-whack dynamics in the housing market, including inventory, rapid home value appreciation and weak sales volumes. None of these problems will be solved overnight, in large part because negative equity will likely be a part of the housing market for years, and easily into the next decade in some hard-hit areas," Zillow Chief Economist Stan Humphries said in a release.