Younger borrowers are more likely to be underwater on their home loans, restricting their opportunities to move, the New York Times reported this week.
The paper cited research from Zillow.com, which concluded that half of borrowers under 40 still owe more than their homes are worth.
Younger borrowers were hit harder by falling home prices due to low levels of equity.
Still, when compared to older troubled borrowers, they are less likely to be delinquent on payments, Zillow.com added.
The same report says the negative equity effect on younger borrowers may help the market by keeping inventory on the sidelines with borrowers afraid to sell. This, in turn, limits supply lifting home values.
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