Odds are good you'll be "underwater" by 2011

Filed in archive mortgage news on August 10, 2009

© SuperFantastic

If you own a home, the odds are good that you'll be "underwater" by 2011.

No homeowner wants this. It's when you owe more on your mortgage loan than what your home is worth. According to a news story in the Victorville Daily Press, nearly 48 percent of homeowners will be in this situation by 2011.

You can bet that many of these homeowners will have bought their residences sometime during the recent housing boom. That's when housing prices across the United States rose significantly. Once the housing crash took place near the end of 2006, though, home prices began to fall.

And that's why so many people will be "underwater" in two years.

It's important to keep in mind one thing: Being "underwater" only really matters if you're trying to sell your home or refinance your mortgage. If you're not doing either of those things, it doesn't matter much what your home is worth.

Remember, owning a home was never supposed to be a way to make fast cash. You're supposed to buy a home, live in it for a significant period of time — at least seven years — and then sell it for a good profit. Say you bought your home in 2001. If you wanted to sell it today, even with the recent drop in housing prices, the odds are good that you'll have made a significant profit from when you bought in 2001.

It's probably best, if you're not selling or refinancing, to not even check what your house is worth. It'll just give you heartache, for no good reason.