Housing Pain Gauge: Nearly 1 in 6 Owners 'Under Water'

Wall Street Journal (10/08/08) P. A5; Hagerty, James R.; Simon, Ruth
Moody's Economy.com says 16 percent of households--or about 12 million--owe more on their mortgages than their homes are worth, leading to concerns about higher default and foreclosure rates down the road and further declines in consumer spending. A report from Zillow.com indicates that 29 percent of homeowners who obtained loans during the last five years are under water, and the Mortgage Bankers Association reports a jump in mortgages 30 days or more past due to 9.16 percent in the second quarter from 6.52 percent during the same period in 2007. However, experts stress that 64 million homeowners have equity in their properties, and most homeowners continue to make timely mortgage payments. Of those homeowners with equity, 40 million have properties that are worth more than their mortgage balances; and 24 million have completely repaid their home loans.