A grim statistic from a deflating housing bubble: almost one-third of the people who became U.S. homeowners in the last five years now owe more on their mortgages than their properties are worth.
Twenty-nine percent of new U.S. homeowners are "upside down" or "underwater" on their mortgages, meaning they have negative equity, Bloomberg News reported today citing statistics from Zillow.com, an Internet provider of home valuations.
Second quarter home prices fell almost 10 percent giving 29 percent of U.S. homeowners mortgages that were valued higher than their homes are now worth, Bloomberg reported. Of those who bought their home in 2006, the peak of the market, 45 percent now have upside down mortgages, Bloomberg reported citing Zillow's figures.
"For homeowners who need to sell, this is a gravely serious situation,'' Stan Humphries, Zillow vice president for analytics, told Bloomberg. "It can also be harmful to communities where the number of unsold homes adds more to inventory and puts downward pressure on prices."