New home buyers have begun to suffer from the drop in housing prices. Reuters reports that one million Americans who have taken mortgages in the last two years are “underwater”. The data provided to Reuters by real estate research firm Corelogic shows that this number means that one of ten mortgages taken over that period is now higher than the value of the home which they cover.
The data confirms why many Americans have stayed out of the housing market completely. This “buyer’s strike” is one reason homes sit on the market for such a long number of days, historically, and why foreclosures are up while prices continue to fall. Many potential buyers believe that prices could fall another 10% of more in many markets. The value of their caution has been confirmed by the new data.