In Florida it seems like it could be more than 1 out of 5. I know lots of young couples underwater on their mortgages, just because they happened to buy in the 2005-2006 period when prices were skyrocketing. Even if you bought with 20 percent down, after watching house values plunge around 40 percent...you’re underwater. None of those I know are in financial problems, however. they are still able to afford their mortgage. But it feels to them like they’re shoveling money in a hole because they don’t believe they’ll be “above water” anytime soon.
If you bought near the top in 2005/6 with 25% down and you have seen a 55% drop in valuations as is the case in Florida you will make payments for 16 more years before you get back to owing what the property can sell for (19 years from origination) ,, or 18 years to make up for the expense of a realtor.
You can pack your bags and rent for half or less in a better house in the same neighborhood in many cases (”musical chairs” anyone?). You are eventually going to fail on the original mortgage anyway if you have to move for a job or some other reason and can’t make a short sale work..