NEW YORK (MainStreet) -- Here’s a disturbing study to wrap your brain around this afternoon: Rasmussen Reports is out with new research that shows 49% of all U.S. homeowners believe there is still financial value in their homes, marking the first time less than 50% of Americans are convinced their homes are not underwater.
There is some reason to believe that the Rasmussen study is an outlier. A similar study by Santa Ana, Calif.-based CoreLogic done last June says there are 10.9 million U.S. homes—or about 22.7% of houses with mortgages—underwater through the first quarter of 2011. Of course that is based on data, rather than homeowners' perceptions of it. CoreLogic does offer three caveats to its study, in any case:
- The decline occurred despite falling prices that can plunge borrowers underwater when they still owe money on their property.
- The data could indicate a skewed analysis because the pricing of homes is affected by foreclosure sales, which usually takes underwater homes off the market.
- Home equity loans affect the overall analysis on being “underwater.” In the study, it was found that 38% of borrowers with second mortgages were underwater, compared with 18% of borrowers without home equity loans.
“Many borrowers in negative equity are still able and willing to make their mortgage payments,” says Mark Fleming, chief economist with CoreLogic. “Those in negative equity and impacted by an income shock of some kind such as a job loss, divorce or death, are much more likely to be at risk of foreclosure or a short sale. The current economic indicators point to slow yet positive economic growth, which will slowly reduce the risk of borrowers experiencing income shocks.”
The Rasmussen study doesn’t quite see it that way.
The firm says it’s the second month in a row that “less than half of America’s homeowners believe the value of their home is worth more than the amount they still owe on their mortgage.”