One Third of New Owners Owe More Than House Is Worth

[jeffrey]

Almost one-third of U.S. homeowners who bought in the last five years now owe more on their mortgages than their properties are worth, according to Zillow.com, an Internet provider of home valuations.

Second-quarter home prices fell 9.9 percent from a year earlier, giving 29 percent of owners negative equity, said Zillow, the Seattle-based service that offers values for more than 80 million homes. For those who bought at the 2006 peak of the housing market, 45 percent are now underwater, Zillow said...


Bloomberg.com: Worldwide

[rob62521]

Wow, one third...wonder how many will have to go into foreclosure because they can't keep up with their payments.

Last Saturday Suze Orman suggested to one gal if she could hold on and keeping paying her mortgage, that things might right themselves in a few years.

[Gruntina]

Originally Posted by rob62521

Wow, one third...wonder how many will have to go into foreclosure because they can't keep up with their payments.

Last Saturday Suze Orman suggested to one gal if she could hold on and keeping paying her mortgage, that things might right themselves in a few years.

I know many who owe more on their mortgage than what their properties are worth in my area but they are not at risks for facing foreclosure. The home value was significantly higher when they first brought their homes in the last 2-7 years. (We are in California)

Despite the housing busts, their mortgage payments stayed the same and it was what was in their budget as they first got the house. But, because of the falling house pricings, they would lose out if they decided to sell. It was bad news for those who thought they were getting into a starter home with the hope of moving up in a few years. They probably wished they waited longer to afford the home they wanted instead of entering in a starter home and being stuck or 'trapped' there. They probably feel lousy that they are paying more than what their house is worth currently while seeing their dream homes are much more affordable and yet unreachable.

Many people get starter homes in the SF Bay Area because the handle bars for achieving a down payment for the lower end homes are much higher than most other places due to higher cost of living.