Want to feel depressed? Just look at the latest housing numbers

Apartment living is looking better than ever

Leave it to CoreLogic to make us feel even more distressed about the national economy. The real estae data firm regulary tells us just how many homeowners are underwater on their mortgage loans. Now CoreLogic is reporting that all those homeowners with second mortgage loans are pretty much financially doomed.

A recent story in the Wall Street Journal summed it up nicely: According to CoreLogic’s most recent numbers, almost 40 percent of homeowners who took out second mortgage loans are underwater, meaning that they owe more on their mortgage loans than what their residences are worth.

Homeowners with second mortgages, in fact, are two times as likely to be underwater as are those who only have primary mortgage loans. Only 18 percent of these homeowners are underwater.

Of course, the proliferation of second mortgages could be seen as just one more example of the greed that many say has sunk the housing industry. Many homeowners grabbed second mortgage loans as way to pay for such frivolities as vacations, home electronics, new cars  or new furniture sets.

But that’s not the whole story. Many other homeowners used the money from their second mortgage loans to pay for far more important items, everything from their children’s college tuitions to their medical bills.

Let’s be honest here: Life in the United States is expensive. College tuition is getting more unaffordable by the year. Medical costs continue to skyrocket. It even costs a small fortune to fill your car’s gas tank.

It’s hard to blame homeowners for grabbing at the only wealth they had during the go-go housing years, the equity in their homes.

The real fear now is that the nation’s housing market won’t return to stability for a long, long time. Think tank Capital Economics recently gave its opinion that the the current housing price collapse is worse than what the country saw during the Great Depression. That’s awfully grim news considering that housing values took 19 years to fully stabilize from the beating it took during the Great Depression.

If you’re not good at math, here’s what that means: If it takes our housing market 19 years to recover, that means housing prices — if you consider now to be the official low point — won’t stabilize again until 2030.

— Dan Rafter

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4 Responses to Want to feel depressed? Just look at the latest housing numbers

  1. Rent your home & own your life.

  2. Pat Bennett Pat Bennett says:

    If there is any positive for this horrible market is that the younger generation can now afford a home.

  3. Annette Canale says:

    Exactly! This is not a necessarily a housing or mortgage crisis, it’s a crisis in which too many people borrowed money using their homes as equity – money to pay for weddings, college, vacations, car, medical bills. The house is still there. Pay your bills.

  4. Rajesh says:

    By :RE: Well, they would support no fcnnaiial fraud prosecutions, just like the current president. The current Republican party is tilted far right/crazy. The current president has been described as a moderate Republican, by comparison.obama’s problem is he had too many wall streeters in his administration. tim geithner? he was at the NY Fed when all this went down. what was he doing? from everything I’ve read he’s interevened many times espousing the pro-wall street view. apparently he clashed with elizabeth warren. Rate this comment: 0 0

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