Realtor magazine is reporting that about 16% of homeowners (or 1 out of every 6) owe more on their mortgage than they would be able to sell the home for. The situation is even worse for people who bought their homes within the past 5 years and haven’t had a chance to build up equity. Last year, only about 6% of homeowners were upside down in their mortgages, and the year before, it was only about 4%.
Really, I wouldn’t worry too much about this if you have no plans for moving in the near future. The market will stabilize and prices will begin to rise again and as time goes by, you will be paying your mortgage down which will help build equity. The problem comes when people who are upside down (or close) need to move. Sometimes, you think you have no plans to move and then something in your life suddenly changes. When that happens, I often see people who have to find a way to bring money to the closing table to sell their home.
Are you curious?? If you would like to know what the market is doing in your Indy-area neighborhood, I can do a quick (read: not as accurate as it could be, but still useful) Comparative Market Analysis for your property and just e-mail you the results. All I need to know is your address, number of bedrooms & bathrooms, amenities, and things like that. I can give you a ballpark figure with no cost or obligation. Just send me an e-mail (firstname.lastname@example.org) with the info and I can help you figure out if you are upside down in your mortgage.