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I mean seriously... a reference to "homeowners underwater" would only mean folks with a mortgage. What else could it mean?
Regardless of the fact that roundabout a 1/3 of people may own their homes outright, it's extremely disconcerting to see these numbers for the other 2/3 who do carry a loan. Especially when you consider areas like FL or AZ where it's 50% of folks who are underwater. This is the situation that "strategic default" was invented for.
So the comparison to the folks who own their homes outright or the ones who finance cars is completely off base... and I suspect that those who made those comments know it. Makes for a nice 1 line zinger I guess.
The fact remains that about 1 in 4 folks who are carrying a mortgage today would need to bring money to closing. That is a significant and troublesome statistic on its own, but I believe it's even more ominous stat when you look at the bigger economic picture and outlook. The general CoL for everyone is going nowhere but up.
I mean seriously... a reference to "homeowners underwater" would only mean folks with a mortgage. What else could it mean?
Regardless of the fact that roundabout a 1/3 of people may own their homes outright, it's extremely disconcerting to see these numbers for the other 2/3 who do carry a loan. Especially when you consider areas like FL or AZ where it's 50% of folks who are underwater. This is the situation that "strategic default" was invented for.
So the comparison to the folks who own their homes outright or the ones who finance cars is completely off base... and I suspect that those who made those comments know it. Makes for a nice 1 line zinger I guess.
The fact remains that about 1 in 4 folks who are carrying a mortgage today would need to bring money to closing. That is a significant and troublesome statistic on its own, but I believe it's even more ominous stat when you look at the bigger economic picture and outlook. The general CoL for everyone is going nowhere but up.
Mikey,
While there is some merit to your point, the fact is, many transparent purveyors of misapplied information pad their gloom by great selectivity in what they quote.
The common emotional and gut reaction to "28 percent of homeowners" is an acceptance of "28% of homeowners."
Unfortunately, basic English is such a hurdle to folks posting pap on the internet, we have to make leaps of faith through incoherence and worse.
When a poster slides sideways and refuses to address an error in any productive manner, it is not unreasonable to press a point.
If the OP meant to say "Borrowers," The OP should have said "Borrowers" in the thread title: "Bloomberg article reports 28% of homeowners underwater" does not explicitly exclude homeowners without debt, and for many the gut impact is unmodified from the statement.
And it is only a compoundment of the error Bloomberg made when they misquoted the Zillow article: U.S. ‘Underwater’ Homeowners Increase to 28 Percent, Zillow Says
"More than 28 percent of U.S. homeowners with mortgages owed more than their properties were worth in the first quarter as values fell the most since 2008, Zillow Inc. said today."
Mikey,
While there is some merit to your point, the fact is, many transparent purveyors of misapplied information pad their gloom by great selectivity in what they quote.
The common emotional and gut reaction to "28 percent of homeowners" is an acceptance of "28% of homeowners."
Unfortunately, basic English is such a hurdle to folks posting pap on the internet, we have to make leaps of faith through incoherence and worse.
When a poster slides sideways and refuses to address an error in any productive manner, it is not unreasonable to press a point.
If the OP meant to say "Borrowers," The OP should have said "Borrowers" in the thread title: "Bloomberg article reports 28% of homeowners underwater" does not explicitly exclude homeowners without debt, and for many the gut impact is unmodified from the statement.
And it is only a compoundment of the error Bloomberg made when they misquoted the Zillow article: U.S. ‘Underwater’ Homeowners Increase to 28 Percent, Zillow Says
"More than 28 percent of U.S. homeowners with mortgages owed more than their properties were worth in the first quarter as values fell the most since 2008, Zillow Inc. said today."
Well. of course... but then you're arguing the semantics of reporting the statistic as a reason to completely disregard the overriding point. This is something readily done by NAR and our illustrious Bureau Labor Stats (BLS), yet you accept how they massage the message.
I haven't seen you comment on the actual point, though... If roundabout 1 in 4 mortgages are underwater nationally, doesn't that strike you as statistically significant? Doesn't that have some type of impact on the housing market?
Well. of course... but then you're arguing the semantics of reporting the statistic as a reason to completely disregard the overriding point. This is something readily done by NAR and our illustrious Bureau Labor Stats (BLS), yet you accept how they massage the message.
I haven't seen you comment on the actual point, though... If roundabout 1 in 4 mortgages are underwater nationally, doesn't that strike you as statistically significant? Doesn't that have some type of impact on the housing market?
I have said several times I am concerned about the economy. An unsupported number thrown out, either purposely or sloppily, to mislead consumers does not change the fact that I am concerned about the economy.
There is a significant track record here, of using incomplete citations specifically to mislead and promote an agenda. Numerous times, and some of them are truly quite bizarre.
The attempt to mislead by overstating the issue via omitting information within the same sentence or paragraph is typical. In this instance, it was the very next phrase that was omitted.
How many homes, by percentage of housing stock, in America are owned by people who are underwater?
We have no idea, and this article did nothing to quantify.
How many USDA, VA, HomePath, Community reinvestment loans were written at 100% funding last month or year, some even with closing costs rolled in, which mean that the owners are underwater as soon as they settle in?
Or, at minimum, have gained no equity?
How much should those loans play on our emotions?
Are they all a disaster, today, for the market?
If 14%, or 15%, or 28% of all homes in the USA are underwater, how many of them are for sale, currently on the market?
Whatever that number is, I am still worried about the economy.
Should we all roll self-flagellating in the dirt, and wear sack cloth and ashes because of some raw number that really has no market application?
I will pass on that opportunity.
Forget about all the foreclosures, homepath, etc, for a moment....
- Next think about all the baby boomers who want to retire and move to a smaller house, somewhere else, and all the young people who dont have good paying jobs. This will lead to a large reduction in pricing to even things out.
- Another issue is when many of the baby boomers refinanced between 2006-2010 and cashed out the equity to buy cars, boats, etc.
- Next big problem, think of all the baby boomers getting old and dying and flooding the market with vacant houses.
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