According to Zillow's Negative Equity Report for the fourth quarter of 2013, nearly 10 million people were underwater on their mortgages in Q4, owing a total of $657bn more than their homes were worth.
But that number is slowly receding. About 3.9 million homeowners managed to get above water in 2013, bringing the negative equity rate down to 19.4% by the end of the fourth quarter. That's down from 27.5% in the fourth quarter of 2012.
"As home values have continued to rise over the past year, millions of underwater homeowners have come up for air and are finally able to put their home on the market," Zillow said in a release. "This increase in inventory should, in turn, help create a more balanced home shopping season than we’ve seen in the past few years, with buyers having more choice and perhaps less competition."
The nationwide negative equity rate is expected to keep falling this year, hitting 17.2% by the end of 2014, according to Zillow
The share of US homeowners with underwater mortgages has dropped below 20% for the first time in years, according to data released by Zillow.