our flourishing economy

Nearly a Third of American Mortgages ‘Underwater’

Just walk away.The economic recovery continues to be a complete fiction, like the Harry Potter books but without all the fun sex magick. Unemployment is officially back to 9%, with real unemployment at 22%. Energy and food costs keep rising as jobless benefits run out and wages are stagnant for the lucky ducks who still earn a paycheck. And there’s a record number of people owing more on their houses than the houses are worth: “28.4 percent of single-family homeowners, representing a peak since Zillow began calculating the data in 2009.” Throw in all the other awful economic news from America and abroad, and you might wonder if this whole system of corrupt corporate welfare/warfare thing has, you know, collapsed forever.

Sure, Wall Street and the big banks and the death-robot manufacturers are “back to normal,” but the 80% of people in this country expected to keep this leaky battleship afloat by purchasing a bunch of unnecessary garbage seem to be “vulnerable” for some reason and aren’t doing their consumer duty, according to Ben Bernanke. So, ultimately, one day, the whole thing falls apart because of too many Poor Folk not buying flatscreens to lull them into deeper complacency.

CNBC reports:

The number of homeowners under water—or, those who owe more on the mortgage than their house is currently worth—amounted to 28.4 percent of single-family homeowners, representing a peak since Zillow began calculating the data in 2009. That was up from 27 percent in the fourth quarter of last year.

Foreclosures also rose, following the moratoriums that had been in place in late 2010. In March, one out of every 1,000 homes was in foreclosure.

Also, home values nationwide have taken the biggest tumble since 2008. Remember 2008? It’s still here, and getting worse even as the calendar says 2011. [CNBC via Cryptogon]

About the author

A writer and editor of this website from 2006 to early 2012, Ken Layne is occassionally seen on Twitter and writes small books and is already haunting you from beyond (your) grave.

View all articles by Ken Layne
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135 comments

    1. nounverb911

      Greenwich CT is back down to it's 2005 prices. Though there is a shortage of houses under $2mil.

      1. mourningnmerica

        When the market gets worse, they'll refer to it as Greenwich Mean Time.

    1. mourningnmerica

      No, no. Don't think that way. Those kidneys just compete with the one of mine I need to sell to pay for my daughter's wedding.

      1. Troubledog

        Cheer up! Once Sharia law is in full effect, you can just accuse her of being sinful and legally stone her to death. Don't give up before the miracle.

  1. BaldarTFlagass

    I'm still ok, but if shit goes further south, I'll be thankful for my nice homeowner's insurance policy and the fact that my arsonist high school buddy is getting out of prison soon.

  2. Sparky_McGruff

    I think if they just make cocaine tax deductible, then it will allow the hedge fund managers to spend more money on call girls, which will move the money into the rest of the economy. It's super simple, dontcha think?

  3. bureaucrap

    Our model for society should be the Strength and Valor that was the Roman empire (say, circa Nero). .001% rich, everyone else a slave. Good times…

  4. the_problem_child

    "The number of homeowners under water—or, those who owe more on the mortgage than their house is currently worth—amounted to 28.4 percent of single-family homeowners, representing a peak since Zillow began calculating the data in 2009."

    Add in credit card bills, and I'd bet more than a third of households are under water. And that's not counting the flooded out ones.

  5. whiterabid

    If values are based on Zillow's numbers, the percentage of underwater homeowners must be 40%. I think it's Newt's fault.

  6. vulpes82

    Ahhhhhhhhhhhhhhhhhhhhhhh. I was missing my fix of Dr. Layne's Patented American Economic Deathspiral Tonic ("Bringing Despair and Hoplessness to the Wonkette Readership Since 2008!").

  7. WriteyWriterton

    Well, is the USA #1 in underwater mortgages?

    If so, USA!USA!USA!USA!USA!USA!USA!USA!USA!USA!USA!

  8. emmelemm

    {le sigh} Yeah, according to the 2011 property tax valuation, my condo is now worth less than what I still owe on it. But hey, that just means my property tax bill went down. I still have a job, and the mortgage is current, so I try not to be in a tizzy about the "underwater" concept.

    Great header picture, btw.

  9. nounverb911

    I hear that are a lot of houses near the Missississippi River that are underwater too.

  10. Rotundo_

    But we need to cut taxes on the wealthy people: A rising tide drowns all suckers? No, that isn't it. A floating deficit makes ships sink? In any case, if we just fork over more money to the rich people, maybe we can get jobs as bodyguards and chauffeurs? Dammit we just need to cut taxes1!!!111!!!!11!!!!!!11!!!!!!!! We will all have more munnies if we just cut taxes!!!11!!!!! Laffer curve don't fail me now!!!!11!!!!!

    1. poorgradstudent

      Aren't we kind of already?

      Although I guess it's more like our leaders are looting the mansion before it burns down.

  11. hagajim

    We're just circling the toilet until the Rapture flushes us all…in 12 days now.

      1. zhubajie

        Roll over and go back to sleep. Later, maybe stroll down to Metro and buy another fifth of Meyers rum.

    1. Bonzos_Bed_Time

      That soon already? I have not been paying attention to my rapture calendar.

    2. Gopherit

      Who are you kidding? Like anyone from wonkette will get raptured. We're stuck here……and if enough christards get raptured, I may grab me a better house from which to watch the apocalypse.

    3. Dudleydidwrong

      I've been driving around looking for a Ferrari or Lamborghini (or even a 'Vette or Mustang) with a "May 21" or "In the event of the rapture…" bumper sticker on it. Haven't found one yet but I still have 12 days to go.

      1. BaldarTFlagass

        Best I've been able to find so far is a 1992 Chevy Cavalier. Paint is a bit oxidized and the headliner is sagging, and needs tires. The hunt continues.

  12. BaldarTFlagass

    I'm having a yard sale in two weeks and you can buy my old 51" flatscreen for 250 bucks and do your part to save the economy. (well, it's a rear projection, but the screen is flat).

  13. rambone

    If you think home prices are low now, just wait till the Osama house hits the market and further increases the McMansion supply.

    1. jus_wonderin

      I have long wondered why we didn't let the Girl Scouts find him. Geez, come Cookie Time they can coax out even the hardest cold heart.

      1. comptoneffect

        They thought about it but they couldn’t find Navy SEAL-sized Girl Scout uniforms.

  14. Sophist [غني عن ذلك]

    Hey, remember when all those nice financial advice people were telling us how our house was our best investment and advising to take out the biggest mortgage we could get to buy the biggest house we possibly could (and even suggesting we lie about our income to get an even bigger one, because what could go wrong?), because prices were going to keep going up, forever, and we were all going to be millionaires with robot butlers, on the moon? I'm sure they all got fired or something, right?

    1. WriteyWriterton

      Got fired and went to prison, Sophist. Every last one of them. Happy ending! Me likey!

    2. m_supercomputer

      I think it's even worse than the snake oil salesman not being fired – I have a few friends who used to be mortgage brokers that actually got pushed out of their jobs for not approving enough obviously-shady loans. Wouldn't be surprised if this was more common that we'd think.

    3. Rotundo_

      Kind of a mixed bag for 'em: The small fish got laid off when the music stopped, but the big guys pretty much just kept on making rediculous money on other schemes. Most of the worst cheerleaders are still on CNBC or FauxBiz peddling the latest snakeoil and pulling down a healthy chunk o' change for doing so. It does surprise me that anyone has any confidence investing anymore. Except for canned food, shotgun shells and high quality sleeping bags.

  15. pinkocommi

    It's a good thing I never could afford to buy a house in the first place. Not being in debt is the new "rich," according to our actually-and-grotesquely-rich overlords.

  16. GeneralLerong

    I see a resurgence in debtor's prisons looming on the horizon. We've already imprisoned the drug-dealing lower classes, now it's time to get to work incarcerating homeowners.

    Turn those housing tracts into exclusive golf courses and resorts. Overlooked by towering prison blocks.

    1. AJW@[redacted]

      Also, sports arenas. Few things instill more community pride in teh poors than a sports team that they can never afford to see play live, but their property and income taxes support.

    2. zhubajie

      The debtors to walk on treadmills to power electric generators? Does that count as new, green, power?

  17. Not_So_Much

    Hah! The foreclosure means I'm no longer under water bitches!!! wait, …what?

  18. Gopherit

    I've been wondering for a while why banks have had zero interest in renegotiating mortgages to help people stay in their homes and to keep the economy from being further sodomized……and then it hit me. These fuckers actually expect another bailout. They build up enough "toxic assets" they'll expect the fed and treasury to bring out the dumptrucks of cash again to save their bacon…….but regular people can go fuck themselves.

    US federal government, servicing corporations since …. well…..forever.

  19. SayItWithWookies

    One day the bankers got together and decided it was time to repeal all those annoying regulations — because getting three times the value of every house they financed just wasn't enough.

  20. Geminisunmars

    Do not despair, Wonketters. On the upside the average CEO remuneration went up 24% just this last year alone! USA USA, etc.

  21. DaRooster

    Gotta love the banks. Keep sending me notices that I'm "pre-approved" for refinance… at a lower rate… apply… "We're sorry, we can't loan on a manufactured home…" But you are the same bank that holds the note now…
    FUCK YOU YOU GREEDY FUCKS!

  22. metamarcisf

    Today's story on the Mississippi River flood notes that 100% of homeowners on certain parts of the delta are underwater. So the news just doesn't get any better.

  23. V572..whatever

    Hate to be the official balloon-puncturer today, but an increase from 27% to 28.4% is not exactly exponential. When people borrow most of the price of a car, they're "under water' the minute they drive off the lot, yet this is not seen as an economic catastrophe. You may owe more than the house is worth, but you still have a place to live. If you can afford the payment it doesn't matter that you didn't "make money" on your "real estate investment," any more than it matters that you don't "make money" on rent. Owning a house is consumption, not an investment. People who believe what real estate agents tell them are often fooled.

    Now stockbrokers: those dudes never lie.

    1. Fox n Fiends

      how dare you inject reason and sense into our hyperbolic universe!! COMMIE!!

    2. Pithaughn

      Hmm. There are an awful lot of folks who are banking on real estate being an investment, because they were told since they had a doll house / toy fort that owning your home was certain to be safe. But…. once the decision was made to dismantle the manufacturing base, and allow wall street types to make bets were lose they break even and win they get fantastically rich, the saps who had purchased or refinanced in the last 5 years or so were fucked. Once they realize what has been pulled over on them, well the manufacture of guillotines will be rising.

    3. ShaveTheWhales

      There is one sorta significant way in which your home loan is different from your car loan — you can't drive your house to a better job market.

      I think the 5% change in the under-the-sea number does, unfortunately, have some significance in that it provides yet more evidence that the residential real estate market has still not bottomed out.

  24. owhatever

    Biggest drop since 2009 when Zillow started keeping the stats? That's not even a two-year database. Not to panic on this one, it's garbage in-garbage out.

    1. snarkycomments

      With notably rare exceptions, Alan Greenspan is a honored and respected economist who's prognostications are accurate and timely.

  25. Hatrabbit

    Foreclosures are rising! finally the numbers are heading up!! This recovery RAWKS!!!

    Wait … what? that's bad?

    *shit*

  26. Hatrabbit

    Love that pic. Nothing says 'American Dream' like a tipsy barn in the middle of a desert.

  27. fuflans

    we're like the weimer republic only instead of bauhaus and fritz lang we get baggers, scooters and flag pins.

  28. JackObin

    Walmart is the number one employer in god's country. That is the only statistic you need to know to realize this nation is fucked.

  29. Pithaughn

    This is what a country looks and feels like right before some charismatic fascists take over, promising that they will restore us to our former glory.

    1. poorgradstudent

      Here's hoping the "charismatic fascists" that were in the making somehow got stillborn and we instead ended up with Sarah Palin, Michelle Bachman, and the Tea Party.

  30. Mort_Sinclair

    No, no, no. This is small potatoes. The most pressing problem in this nation is that I, as a public school teacher, am allowed to collectively bargain increases in my health care copays. When that ability is taken away from me, THEN all will be right with the world.

  31. HobbesEvilTwin

    28% of single family mortgaged homes being worth less than the fancy bankers pretended they were worth is clearly the fault of lazy Americans and in no way a reflection on teh bankers having poor math skillz.

    1. Dudleydidwrong

      Yeah. Makes you feel all warm and fuzzy inside–just like chugging a quart of cold milk only to discover half-way through that the milk was spoiled. Now you know something even worse is going to happen.

    2. HuddledMass

      Ken is telling us the truth, Owls, and …. YOU CAN'T HANDLE THE TRUTH!

      Hiding under the bed now.

  32. VinnyThePooh

    I blame all those lazy fuckin' people that bought an affordable house then quit their $60k/yr jobs so they can get on unemployment and welfare!

    I earned my free Freedumb Skooter!

  33. chascates

    "What is the use of a house if you haven't got a tolerable planet to put it on?"
    Henry David Thoreau (1817 – 1862)

    "A man builds a fine house; and now he has a master, and a task for life; he is to furnish, watch, show it, and keep it in repair, the rest of his days."
    Ralph Waldo Emerson (1803 – 1882),

  34. MiniMencken

    Call me when a single-family house in any city in the United States that a sane person would want to live in starts costing less than $1 million.

  35. KeepFnThatChicken

    Let's get back to that "bought a bunch of unnecessary garbage" part, for a moment.

    Isn't it sad to know that — to get back where we were — we have to buy shit again?

    Somehow, I think it's better for our soul if we stay broke.

Comments are closed.