The relentless slide in home prices has left nearly one in six U.S. homeowners owing more on a mortgage than the home is worth....
About 75.5 million U.S. households own the homes they live in. After a housing slump that has pushed values down 30% in some areas, roughly 12 million households, or 16%, owe more than their homes are worth, according to Moody's Economy.com.
The comparable figures were roughly 4% under water in 2006 and 6% last year, says the firm's chief economist, Mark Zandi, who adds that "it is very possible that there will ultimately be more homeowners under water in this period than any time in our history."
Among people who bought within the past five years, it's worse: 29% are under water on their mortgages, according to an estimate by real-estate Web site Zillow.com.
Among mortgages on one- to four-family homes, 9.16% were a month or more overdue or were in foreclosure in the second quarter, according to the Mortgage Bankers Association. That compared with 6.52% a year before and was the highest level since the association began such surveys 39 years ago.
It's interesting to me that those who took the "irresponsible" no-money-down interest-only home loans can walk away from this mess without significant penalty, while "responsible" people who put up a downpayment and built up their equity would have to walk away from a significant chunk of their wealth to get out from under an inflated mortgage. Screwed whether they stay or they go.
If I were a rightwing market fundamentalist, I would look at this situation and conclude that the shiftless, poverty creating minority hordes were the market selected paragons of capitalist virtue, having protected themselves from easily identified asset hyperinflation by wisely investing next to nothing in return for a roof over their heads. It's all these middle class suckers who have foolishly run their own financial futures into the rocky banks of the largest real estate bubble in history that are the problem.