Home shoppers could be getting a relief from that inventory squeeze in coming months as rising prices lift more homes out of underwater positions.
The data firm CoreLogic reported Wednesday that roughly 850,000 homes with mortgages went from underwater positions to positive equity during the first three months of the year. That amounts to about 39 million homes with equity.
"The negative equity burden continues to recede across the country thanks largely to rising home prices," said Anand Nallathambi, president and chief executive of CoreLogic. "We are still far below peak home price levels, but tight supplies in many areas coupled with continued demand for single-family homes should help us close the gap."
About 19.8% of U.S. homes with mortgage debt are currently worth less than the mortgages on those properties, a decline from about 21.7% of all mortgaged homes last year. A total of 9.7 million homes were underwater in the first quarter.