Wednesday, September 01, 2010
Negative equity spreads across the USA
There have been some shocking housing figures coming out of the US for a while but I have just read something that took my breath away.
23% (11 million) of all properties with mortgages are in negative equity at present and this rises to 28% if you include people with less than 5% equity in their houses.
Those numbers are staggering.
I well remember being in negative equity during the early nineties and it was an incredibly gloomy period for my wife and I.
Fortunately we tightened our belts and managed to struggle through without losing our jobs and a few years later we came out of the other side unscathed.
The other thing to remember is that the subsequent years were good to us and we saw a substantial rise in value.
However, some of the regional US figures simply beggar belief and I fear for the homeowners.
I have never been to Nevada or Arizona and beyond knowing that they're in the west I'd struggle to tell you much about them.
What I do know however is that, according to this paper from Corelogic, 68% and 50% respectively of all the mortgaged properties in those states are "underwater".
Sixty eight percent....it's going to be a long old struggle for many of those people to hold on to their homes.
And when America sneezes....this report in the Daily Telegraph today about the UK housing market and the drop in mortgage lending doesn't make cheery reading either.
I certainly don't want to come across as being at all smug but at times like these it's very comforting to know that the French housing market has the reputation of being predictable and almost dull in its stability.