According to a report from FirstAmerican CoreLogic, more than 11.3 million mortgage holders have negative equity – they owe more on their mortgage than what their home is worth. This represents almost 25% of all Americans with a mortgage.
Worst still, more than 10% of people with a mortgage owes 25% more than what their home is worth. Another 2.3 million only have 5% equity which could be soon wiped out if house prices continue to fall.
This can only be another blow to banks who are licking their wounds from the collapse of the U.S. Commercial Property Market.
ยป 11.3 million homeowners underwater on mortgage – Marketwatch, 23rd February 2010
This should be enough to make the 200,000 first home buyers nervous.
But hey – property only ever goes ‘up’ in Australia according to real estate agents..
Yeah sure.