As of May 2012, one out of every three American homeowners is underwater.
Lost in a vast ocean of financial debt it appears that we may have finally reached land as recent economic data shows a 3.4% uptick on new housing starts. However, this news may just be an island of hope to be short-lived as many Americans still struggle to stay afloat miles from the shores of economic recovery.
Economists pour over the latest financial data like Captains of the new world charting a course through unknown seas searching for any signs of safe harbor. Unfortunately for many Americans safe harbor is nowhere to be found on this ship! According to Zillow, one of every three American homeowners is currently underwater on their mortgage (that’s roughly 16 million lost at sea). As fatigue sets in from carrying this burden many will be forced to either go down with a sinking ship or swim for shore. The chart below shows which cities have been the hardest hit by sharp declines in equity and the percentage of those mortgages that are delinquent.
We already know that there are 1.5 million pending foreclosures set to enter into the housing inventory this year. The result of new shadow inventory will further dilute home prices driving the number of underwater mortgages higher and more into foreclosure. How long before all 16 million survivors decide to abandon ship?
Contributor, designer & admin for JohnHart Gazette.
1 comments