Nearly 10m US households remain stuck in homes worth less than their mortgage and a similar number have so little equity they can’t meet the expenses of selling a home, according to a report by Zillow Inc.

With 20m households looking at making a loss if they sell their home, the US housing market has entered a stagnant period.

At the end of Q1this year 18.8% of US homeowners with a mortgage (9.7m households), were ‘underwater’ on their mortgage. While that is an improvement from 19.4% at the end of last year and a peak of 31.4% in 2012, those figures understate the problem.

In addition to the homeowners who are underwater, roughly 10m households have 20% or less equity in their homes, which makes it difficult for them to sell their homes without dipping into their savings.

Most homeowners typically use their home equity to cover broker fees, closing costs and a down payment for their next home. Without those funds, many homeowners can’t sell.

“It’s a sobering appreciation that negative equity is going to be with us for a while to come,” said Stan Humphries, Zillow’s chief economist. He added: “Negative equity is central to understanding a lot of the distortions in the marketplace right now.”