Link to the article that Mark commented on....
http://www.cnbc.com/id/42957613
We don’t need these data to tell us we have a stupidity epidemic in the USA.
The 2008 election clinched that label.
We don’t need these data to tell us we have a stupidity epidemic in the USA.
The 2008 election clinched that label.
Unless... the homeowner wants to keep and rent out the first dwelling. That's what my parents did, twice. It was lucrative enough to leverage a modest salesman's salary, with his wife's entrepreneurship, into a middle class home.
Not everybody who has negative equity has a bad loan. There were a few years (bubble) where most all buyers paid inflated prices for their homes. I think the number of homeowners who have devalued (bubble burst) homes is real trouble for our economy.
I have no idea how to solve this problem and I don’t see it changing soon.
It only becomes a distress situation if you either have to sell right away or you become unable to make the payments. If neither applies, market value does not matter. In many cases owners have made money repeatedly when values rose and interest rates went down with cash-out refis.
Values always have come back, it is just a matter of how long it takes.
The solution is more government money for home buyers who can’t pay their loans. You guys are slow learners.
I think this is what will make inflation necessary in the future.