Nearly half of mortgages could end up underwater
Data from June show that 24% of homeowners already owe more than their houses are worth, and the number is predicted to rise.
Posted by Mai Ling at MSN Real Estate on Thursday, August 6, 2009 10:34 AM
Aw, predictions schmredictions. One minute we're screaming about an upswing in the real-estate market, the next we're plotting its demise.
It seems that these days analysts are all over the place. Yes, month-to-month home prices are back on the rise, but since they still have a long way to go, we really can't allow ourselves to get all overanxious.
Deutsche Bank sure isn't helping my enthusiasm with its report reminding us that prices still are dropping in parts of the country. And as they continue to do so through the first quarter of 2011, nearly 48% of mortgages will end up underwater, meaning the borrowers have mortgages that exceed the value of their homes. From MarketWatch.com:
There have been lukewarm signs recently that the residential market is stabilizing after peaking in 2006. However, job losses, mounting foreclosures and depressed credit markets could delay the recovery, economists say. In particular, many worry about a wave of coming mortgage resets that could spike foreclosure rates.