Housing debt still traps 10 million Americans

Nearly 10 million Americans remain financially trapped by homes worth less than their mortgage debts — an enduring drag on the U.S. economy almost seven years after the housing bust triggered the Great Recession. During the first three months of this year, 18.8% of homeowners with a mortgage — 9.7 million — owed more on their loans than their properties would sell for, according to online real estate database Zillow. Though that was an improvement from the 25.4% of a year ago, the share of such "underwater" homeowners is about four times the historic average. An additional 18.1% of mortgage holders were "effectively" underwater: They had equity, but the proceeds from selling their home would be too low to recoup the sales costs and also put a down payment on a new property. The consequence is that few Americans are putting their homes on the market, thereby limiting the economic growth made possible by sales. Because of the shortage of homes being listed, bidding wars have inflated prices in parts of the country to levels that squeeze out many first-time and middle class buyers. The problem is most pronounced among starter homes with prices averaging around $100,000, 30.2% of whose owners are burdened by underwater mortgages, sometimes called negative equity. Nationwide, the median sales price in March was $198,500, up 7.9% year-over-year. [vc_separator type="transparent" up="0" down="10"] Comment: The name of mortgage is derived from French words "mort" and "gage"- literally "deadly guarantee". In the middle ages, a person who was unable to pay a loan to the lender had to pay off by his home, which often ended in the debtor's death. Since then, almost nothing has changed, and only became more sophisticated. Crisis of 1998, began due to the inability of millions Americans to pay the mortgage interests imposed on them by bankers. And today, nearly a third of American homeowners remain hostages of the financial capital - they can't even terminate the “cabalic” agreement, because the market price of their house is not enough for the credit payment. Meanwhile, a roof over one's head, food security and assistance from others are the three basic human needs. And to end the parasitic capital infringement on them is possible through the socializing of financial flows – as it is in MMM.