In this Wednesday, Sept. 18, 2013, file photo a for...

In this Wednesday, Sept. 18, 2013, file photo a for sale sign hangs in front of a house in Walpole, Mass. Freddie Mac reports on mortgage rates for this week Thursday April 14, 2014. Credit: (AP Photo/Steven Senne, File)

Nearly 10 million Americans remain financially trapped by homes worth less than their mortgage debts -- an enduring drag on the U.S. economy almost seven years after the housing bust triggered the Great Recession.

During the first three months of this year, 18.8 percent of homeowners with a mortgage -- 9.7 million -- owed more on their loans than their properties would sell for, according to the online real estate database Zillow. Though that was an improvement from the 25.4 percent figure of a year ago, the share of such "underwater" homeowners is about four times the historic average.

On Long Island, a far smaller share of homeowners are underwater on their mortgages, according to the most recent report by real estate data firm CoreLogic, released in March. In the last three months of 2013, 8.7 percent of Long Islanders with mortgages -- 47,761 households -- owed more than their homes were worth, the Irvine, Calif.-based firm reported.

Nationally, the picture was in some ways worse than the 18.8 percent figure implies: An additional 18.1 percent of mortgage holders were "effectively" underwater, according to Zillow. These homeowners had equity, but the proceeds from selling their home would be too low to recoup the sales costs and also put a down payment on a new property.

The consequence is that few Americans are putting their homes on the market, thereby limiting the economic growth made possible by sales. Because of the shortage of homes being listed, bidding wars have inflated prices in parts of the country to levels that squeeze out many first-time and middle-class buyers.

The problem is most pronounced among starter homes with prices averaging around $100,000, 30.2 percent of whose owners are burdened by underwater mortgages, sometimes called negative equity.

"The unfortunate reality is that housing markets look to be swimming with underwater borrowers for years to come," said Stan Humphries, chief economist at Zillow.

Several major U.S. metro areas are stuck with residents who have high rates of negative equity. In Chicago, almost 45 percent are underwater or effectively underwater. The rate is 53.1 percent in Atlanta and 50.6 percent in Las Vegas.

With Maura McDermott

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