Many Chicago area homeowners have yet to recover all the lost equity that bottomed out in 2009. According to a report released by real estate firm Zillow, nearly one in five Chicago-area homes are still underwater with their mortgage.

A home is considered underwater if the homeowners owe more on the property than the property is currently worth. If there is a $300,000 loan on a $250,000 house and the owners want to sell, they would have to bring another $50,000 to settle the mortgage. According to the report, Chicago still ranks second nationally among major cities in the United States who are underwater with their mortgage.

In another report, real estate data firm CoreLogic predicts home values in 2016 will continue to rise and this is certainly welcome news for many Chicago homeowners. The inability to sell at property and at least break even is one of the factors that are continuing to drive demand for rentals. There simply isn’t enough inventory to satisfy the demand for the area and single family homes, including condominium units, are a highly sought after rental property. The only other metropolitan area where there are more owners who are considered underwater is Las Vegas.

As housing prices continue to rise and fewer homes break out of their underwater status, home sales will pick up as more inventory is released into the marketplace. As it relates to financing, mortgage rates look to stay within a relatively tight range and are about 0.375% above historic lows and still very attractive. Yet until property values for those 20% who are underwater recover, Chicago will continue to see rental demand strong.