Skip to comments.More than one in five homeowners underwater
Posted on 05/06/2009 6:35:14 PM PDT by traumer
NEW YORK (Reuters) - Home values in the United States extended their fall in the first quarter, with more than one in five homeowners now owing more on their mortgages than their homes are worth, real estate website Zillow.com said on Wednesday.
U.S. home values posted a year-over-year decline of 14.2 percent to a Zillow Home Value Index of $182,378, resulting in a total 21.8 percent drop since the market peaked in 2006, according to Zillow's first-quarter Real Estate Market Reports, which encompass 161 metropolitan areas and cover the value changes in all homes, not just homes that have recently sold.
U.S. homes lost $704 billion in value during the first quarter and have depreciated $3.8 trillion in the past 12 months, according to analysis of the reports.
Declining home values left 21.9 percent of all American homeowners with negative equity by the end of the first quarter, Zillow said.
By comparison, 17.6 percent of all homeowners owed more on their mortgage than their property was worth in the fourth quarter of 2008, and 14.3 percent were underwater in the third quarter of last year, the reports showed.
(Excerpt) Read more at reuters.com ...
Underwater? Isn’t that torture?
We didn’t buy more home than we could afford, fifteen YEARS ago; more than half-way paid off, due to just throwing a few extra bucks ($25) on the principle each month.
What a concept. ;)
Never fear! ACORN is coming with lead lifevests!
What is more alarming, is that 37% have no mortgage at all.
What does that say about the remaining 63%?
Actually another article states 1 IN 4 (Bloomberg) but didn’t allow posting :o)
Almost a Quarter of US Homeowners Are Underwater
“We didnt buy more home than we could afford, fifteen YEARS ago; more than half-way paid off, due to just throwing a few extra bucks ($25) on the principle each month.”
Well gee some people haven’t been able to stay in the same location for 15 years and had to buy at the inflated rates or rent an apartment.
And at least 90% of stock/mutual fund-owners took a severe cut in their portfolios bottom line this year. That fact always seems to get over looked in all this whining about decreased home prices.
I have three nephews who have been able to purchase homes this year because prices have become more affordable.
Good news for them!
There are millions who paid inflated housing prices and are now under water. Not all of these folks have bad loans or can’t make their payments.
“There are millions who paid inflated housing prices and are now under water. Not all of these folks have bad loans or cant make their payments.”
Thats right, just like losing your job doesn’t mean you are a slug or a deadbeat or lazy.
Making people risk adverse means we won’t have the growth and ingenuity that made this country great.
We moved into our house in Dec.'92, with a 15 year mortgage that was paid off in about 8 or 9 years, I don't remember exactly but I do remember that terrific feeling of actually owning the house....Well, co owning it along with the tax assessor.
You can be “underwater” on your mortgage without having bought more home than you can afford. Many that are “underwater” are still able to make their payments, it just means their houses (due to falling prices) are now worth less than they paid for them.
This has happened to quite a few young couples I know. They bought a home a few years ago (during the boom) put 20 percent down, but prices have fallen around 25-30 percent in our area, so they now owe more than their house is worth.
They’re still making their payments and intend to do so, yet they’re still “underwater” on their mortgage.
How about bad judgment? If one paid too much for an over priced dwelling, I’d think it would be a lesson for the next purchase, pay what you think it is worth within your budget
Or idiots like myself who refinanced and "consolidated" my credit card debt, my truck payment, etc.
And then to add insult to injury they tacked on over 5,000 dollars in "closing" costs.
What closing costs!!!??? It took all of 15 minutes to sign something like 100 pages. How in the world could that cost 5,000 dollars.
Oh, well. I don't blame the mortgage guy. As I said, I was an idiot.
“How about bad judgment? If one paid too much for an over priced dwelling, Id think it would be a lesson for the next purchase, pay what you think it is worth within your budget”
Must be nice to live in a perfect world.
For several years here in central Florida there were bidding wars for homes. Walk away without making an offer and you lost the house.
Think its overpriced? Wait a month and watch it increase 10%.
Want a place to live? Rent an apartment, pay for an overpriced home or find a bridge with room under it.
“Oh, well. I don’t blame the mortgage guy. As I said, I was an idiot. “
There were lots of idiots. There were also lots of predators.
My home was just appraised 80% higher last week than it was 7 years ago.
Are they SCUBA certfied?
and there are many times when some obviously should have walked, think of those who found a place they ‘just loved’ and couldn’t walk away from, whose fault is that?
As for a specific geographic location such as central Florida, even there, I’d guess there are still small towns that real estate would be priced cheaper, or they could buy a piece of land and get a trailer house, there’s options. Bid more than a house is worth and they are going to have to live up to that obligation, it’s their choice
My bro refinanced 3 times to cover his credit card debt, each time he just ran his credit cards right back up to the max, and the third time, I told him that when he’s $20,000 back in debt, he’ll be right back where he is today with no wiggle room in the budget, and he did that too
Two years from now they will be underwater as well.
Yes and it was all BS, did they us Vaseline!!
so 20% are in over their heads eh — that figure don’t sound logical to me.............
Take a deep breath and drown or pay your mortgage and shut up!!!
I am guessing you don’t live in Phoenix... according to the tax man, my house among most of the rest of Phoenix has lost over half it’s value in a year, from $142k to $53k... I can buy a house in my neighborhood for less now than I did 14 years ago...
I remember in the old days when a bank's appraiser would veto a mortgage if he determined that a house was overpriced for the market. And that's why, in part at least, people had the feeling that the bank wouldn't "give them the money" if the house price was way out of line with prevailing prices.
As we all know, that kind of stuff stopped at about the same time that people actually had to qualify for a mortgage and put 20% down.
“and there are many times when some obviously should have walked, think of those who found a place they just loved and couldnt walk away from, whose fault is that?”
You don’t understand, this was even happening at termite infested hovels in the inner city. It wasn’t about the ‘dream home’ it was about having a home period.
“Id guess there are still small towns that real estate would be priced cheaper, or they could buy a piece of land and get a trailer house, theres options.”
I can tell you don’t live here. Any place within 50-60 miles had the same thing. Sure you could save some by going that far away but everyone else had the same idea.
I like how people like you always focus on the buyer and call them scumbags, while ignoring the blatant fraud in our govt and the banking industry.
“I can buy a house in my neighborhood for less now than I did 14 years ago...”
Same here, and the banks are liquidating their property’s driving the price even lower.
Except you won’t find a home here (tampa) for $53k, the low end is the $140k.
>>and there are many times when some obviously should have walked, think of those who found a place they just loved and couldnt walk away from, whose fault is that?<<
Part of it depends on why you bought the house.
If its for speculation or non-speculative short term use then walking away may make sense.
But I bought my house for wife and I to live for at least 20 years to start and raise a family. Our monthly payment is a bit less than our rent was and so the market value of the house doesn’t make that difference to me.
Not to say I won’t be sad if we go underwater but it won’t have significant practical effects.
I wasn’t trying to make a blanket statement, I understand there are some circumstances that would force the buyer to choose, but in most parts of the country that wouldn’t be the case. And your right, I know little of central Florida
Yep. Every situation is different. I spent 20 years of my life moving from pillar to post.
And then I settled down, raised a family and stayed put. It was timing, as well as common sense. :)
“Well, co owning it along with the tax assessor.”
No kidding! :)
“...so they now owe more than their house is worth.”
Yep. It happens. There’s a lot to be said for living in the Boring Old Midwest, where the housing market has been stable, as well as the job market...up until now.
I’m glad I’m not selling in this market. Buying? That’s another situation altogether. You can get some real steals around here if you’ve got the cash and credit to do so.
This is the 5th house I’ve owned. I always had a farm in mind, and that’s what I was working toward when I was painting, wallpapering, sanding floors, laying tile, etc. I never would’ve been able to fix them up and flip them to my advantage in any other housing market than here in the Midwest.