Underwater? The New York Federal Reserve thinks you'll be a renter soon

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July 9, 2010
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In a recent paper, the New York Fed studies the likelihood of a continuing drop in homeownership. To address the question the authors propose that anyone who is underwater in their home should be considered a future renter:"According to Haughwout, Peach and Tracy [the authors of the study], negative equity homeowners will face such daunting saving requirements to retain their home or purchase a new home that they will very likely convert to renters over time."See the study here: http://www.newyorkfed.org/newsevents/news/research/2010/rp100604.htmlBottom line: While the official government message is that underwater homeowners should do everything they can to hang in there, one could argue the New York Fed is already writing them off.

Written by:
Written on:
July 9, 2010
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Not Categorized