Thursday, February 21, 2008

Moody's: 8.8 million Homeowners Underwater

by Bill McBride on 2/21/2008 11:16:00 PM

From Edmund L. Andrews and Louis Uchitelle at the NY Times: Rescues for Homeowners in Debt Weighed (hat tip SC)

Not since the Depression has a larger share of Americans owed more on their homes than they are worth. With the collapse of the housing boom, nearly 8.8 million homeowners, or 10.3 percent of the total, are underwater. That is more than double the percentage just a year ago, according to a new estimate of the damage by Moody’s Economy.com.
This article is mostly about the various bailout plans being proposed. But there is this comment (something I've been meaining to mention) on the impact of the housing bust on mobility in the U.S.:
People cannot move easily to jobs in other cities if they have to sell their homes at a loss.
I haven't seen the new Economy.com estimate, but I think the 8.8 million number might be a little high. However it is definitely in the ballpark. The 10.3 percent is of total homes including second homes (see here for data). I think a better number would be the percent of owner occupied homes with mortgages: 8.8 million underwater of the 51.2 million owner occupied homes with mortgages (see here) is about 17% of homeowners with mortgages are underwater according to Economy.com.

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