Dollars & Sense: 1 in 5 Homeowners Under Water and Sinking Fast

[marmar]

1 in 5 Homeowners Under Water and Sinking Fast
by Dollars and Sense


Over 20% of homeowners (more than 1 in 5) owe more than their homes are worth, according to a new study by Zillow.com. In all, about 20 million homeowners have mortgages worth more than their houses.

Median home prices have fallen 18% in the first quarter of 2009 compared to the same period a year earlier, with no bottom in sight.

Mortgages made at the peak of the bubble are in the most trouble. Nearly 60% of mortgages written in 2006 are underwater. Even with lower prices and tighter lending standards, about a third of 2008 mortgages are higher than the values of the homes.

Certain areas are worse off than the average. In Las Vegas, 67.2% of homeowners would have to pay someone to take their houses off their hands. In Stockton and Modesto California, more than half of all homeowners owe more than they could sell their houses for.

--d.f.


http://www.dollarsandsense.org/blog/2009/05/1-in-5-homeowners-under-water-and.html

[LooseWilly]

1. Am I an awful human being

... if this means to me that I might finally be able to afford to buy a home?

[Booster]

2. No. That doesn't make you an awful human being and you

better damn well buy a house when the market is like this - you would be a fool not to. That doesn't mean that you should be laughing at the people who are losing their houses, but, because you asked the question, I'm giving you the benefit of the doubt that you aren't doing that. Find a way to do it because houses can go up just as fast as they went down.

[LooseWilly]

5. Thanks for the benefit of the doubt.

The next question is.. will I be able to win the race to be gainfully employed in a respectable enough job to secure a loan before the economy turns around... I kind of doubt it... but you win a couple, then you lose a whole lot... it's just life..

[Booster]

7. You can do it. I have faith in you. Maybe not this year, but

this market will be down a long time so shoot for the moon. Just don't do what my nephew did and get a bigger, nicer, more costly house than you can afford.

[MADem]

3. No.

Buy low, sell high is good business. You can walk and chew gum at the same time. You can feel sorry for people who are in hot water, and you can also take advantage of an economy that favors your securing decent housing for yourself and your family.

[deminwi]

4. It doesn't matter in most cases

Look, being "underwater" with your home loan is not bad, as long as you don't need to sell your home. If you are happy with your home, happy where you live, and are able to meet your bills, it shouldn't matter. Nothing has changed for you. Last we checked, you are happy with your home, where you live, and you are able to meet your bills....today is no different than if your home was worth double the price.

If you have to sell, then yes, this is a bad moment in your life and it sucks.

[lunatica]

6. What a lot of these people need to do is hang on to their homes because

this depression will end and the value of their homes will go back up to at least be the same as the mortgage. People who can should buy homes now when they're selling low. Of course that's all contingent on whether they have jobs or not.