Half Of Home Borrowers Under Age 40 Are Underwater On Their Mortgage | The percentage of Americans who owe more on their mortgage than their home is worth fell last month as home prices rose, but younger borrowers are still struggling to keep up on their loans. Among borrowers under age 40, 48 percent are underwater on their mortgage, twice the rate of older borrowers, according to a report from Zillow. “Negative equity is trapping young people in their homes, preventing them from selling. These homes are like the very starter homes potential first-time homebuyers are seeking,” Zillow chief economist Stan Humphries told CNN Money. This week, the Federal Housing Administration announced new rules on short sales that will make it easier for underwater borrowers to sell their homes.