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Yep. Don't worry about value fluctuations too much if you're living in a house you like and can stay in it for years to come.
Be careful, though, not to fix it up so much that it far surpasses the quality of the other homes in your neighborhood. Doing such is also a money loser.
Am I the only one who noticed this is a Relationship question, and not about OP buying at the wrong time, or using the home like a atm machine?
Op, unless you bought and kept this house over your wifes objections, she is dead wrong. In a perfect marriage, both make big decisions together. If one doesnt or wont help, they should like it and lump it. Some SO's love to make their partner make every decision, and that way THEY can never be the idiot.
When your house went up in value, did wifey try and get you to sell it? If so, she has a bit of a gripe, but honestly, you are not the lone ranger in this senario. If you had sold, most likeky you'd have bought a more expensive home and could be even more upside down than now.
Did she have any say-so in choosing this house? If not, she may resent you for getting only what you wanted. If she did help, whats her gripe? She should be your partner during the good & the bad, and if you are treating her as a equal, she shouldnt be blaming you. If she was your cheerleader when all was good, she should also sympathize when its bad, imo.
I bought a house in 2001: 30 yr fixed rate. I did not "borrow against it", sent $100 extra each month toward principal, always paid on time, and I was underwater until recently. According to Zillow, the house is worth more than I owe on it.
I don't think Zillow keeps up with the latest trends. Only a local realtor and appraiser can give you an accurate picture of the market where you live.
You bought in 2003, way before the bubble started. Forces beyond YOUR control caused a decline in home values throughout the country.
Your wife is not only mistaken, but also out of her depth if she thinks it is your fault that your house went down in value.
Bascially anyone who bought from 2003-2006 has lost value in their home. I know everyone who claims to be financial geniuses on here will gloat that they were smart enough not to buy (usually people who bought a few years before out of their own luck), but I digress.
At that time, everyone, and I mean EVERYONE, was saying "buy, buy buy.". Real Estate agents, financial planners, accountants, friends, relatives, everyone. "It will always go up, it's a tax break, it's putting down roots, etc, etc". I heard it all and went against my own judgement. Luckily I bought something way beneath my means out of the fear of a crash, something I can carry while still buying another home, but I consider myself more financially savvy than many people. Not a genius like most of the loud mouths on this forum.
If I had purchased some of the places we were looking at, or listened to the bank that would have approved me for SIX times my household income in mortgage, I'd be in much worse shape now.
In short, no, I don't think it's anyones fault. There were a lot of people telling a lot of lies back then, and nobody in the government doing anything to slow it down.
I did not borrow anything "on the house." It is simply worth $50k less than I paid in 2003, according to zillow.
My point was say I was hammered by the bubble and housing crash. Is my wife right in saying it was incompetence or mismanagement on my part that caused that $50k to disappear?
Of course it is not your fault. People were swindled. We have been told our whole lives, but a house, buy a house and then the banks and congress crash the market.
I would look into a short sale. You can re buy a similar house for less money.
Most of you dolts are not answering the questions but instead are acting the internet toughguy/gal.
While the answer is maybe the answer also depends on a few things. Did you destroy the economy? No? Then that's not your fault. Is this a case of neighborhood depreciation (all homes near you) or you not taking care of your home and having it fall apart, look like hell etc?
The devaluation of a home can have to do with the neighborhood, upkeep, location etc but if the economy is in the toilet and the housing market is below that then IMO it's not your fault.
I'm just glad you are still making payments and not dragging things down by artificially foreclosing and trying to get bailout money.
PS. If your wife has a problem with it then tell her to pi$$ off.
The thing about a bubble is that no one really knows when it is hitting or its about to burst. Likewise alot of people mistimed the bust in certain areas assuming it had hit bottom. They bought as investment too early and lost more or waited too late & will not realize the full appreciation.
This whole thread is bizarre since underwater generally means you owe more on an assett (house, car, boat, etc) than the balance of the loan. If you are not carrying a mortgage you would not be underwater.
Also point out to your wife that if the next house you buy is down 50k in value the whole experience is a wash. Plus you've lived in the house 9 years- I'm guessing you would have had to pay atleast 50k for monthly payments on a lease of apartment during that time.
Can I ask what you paid- if it was 100k then the 50k loss is brutal but if it was 500k that is not a bad loss comparatively. And again- whatever you buy next will most likely have suffered the same loss in value.
You did fine. Few recognize bubbles while they are still growing otherwise they would not be growing. We all have 20/20 hindsight. I should have bought Microsoft stock in 1980.
Forget Microsoft - "Apple’s share price on May 31, 1985, when Mr. Jobs was stripped of his power before being shown the door by then-CEO John Sculley, was $1.98, below its split-adjusted share price."
I sold my Apple stock at 75, and thought I did good
*sigh
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Some SO's love to make their partner make every decision, and that way THEY can never be the idiot. 
