According to Zillow 10 Million households are still underwater on their mortgages. On top of that over 10 Million households have 20% or less equity in their homes. While both numbers represent a significant improvement from their 33% peak in 2012, they don’t tell the whole story.
What’s Next?
Most of the research/commentary associated with the numbers above assumes that the housing market will continue on it’s recovery trajectory to eventually get everyone out of this predicament. Unfortunately, I do not share in their enthusiasm.
In fact, my mathematical work continues to show that things will get much worse for the housing market. In fact, I wouldn’t be at all surprised to see the number of underwater mortgages as high as 50% by the end of 2018. Why?
As I have suggested before, what we are witnessing in the real estate market now is a Stage 2 – Dead Cat Bounce before Stage 3 – massive decline. Basically, the real estate market has the same internal 17-Year structure as the stock market associated with it. In other words, the real estate market is about to repeat what you saw in the stock market between 2007-2009. Put your helmet on, it’s going to be an ugly ride. The real estate market is already rolling over.
You can learn much more about this here. Real Estate Collapse 2.0 Why, How & When
