Monday, June 22, 2009

20% of ALL U.S. Mortgages are Underwater and More Damage to Come

This is simply an amazing statistic.

20% of ALL the mortgages issued on residential property in the United States are underwater.

Think about this. One in every five homeowners has a property worth less than than the debt against it.

Whose fault is this? Not mine.

I warned people for four years that residential property prices were too high and a huge fall was coming. Cheap money aside, it was an AWFUL time to buy real estate.

Now what's next? A real estate market crippled by tight money due to inflation and the need to squash it out of the U.S. economy.

It's not just me saying this. Read this interview with Philadelphia Fed President Charles Plosser.

Or even better, watch this video of Plosser talking about the Fed's inadequate response to inflation.

Anyone who tells you the U.S. residential real estate market is going to improve sharply soon is pulling your leg. Or more accurately, attempting to pull your wallet from out of your pants leg pocket.

Robert J. Abalos, Esq.