The Business Insider had a scary post yesterday about a recent report from Deutsche Bank predicting that 25 million homeowners, more than half of those with mortgages, will have negative equity by next year. According to the Case-Shiller Index, average peak-to-trough decline nationally as of April 2009 was 33 percent, with New York only off 21 percent. Deutsche Bank thinks that national number is heading to 40 percent, with the Northeast making up for lost time; in addition, it’s the blue-chip loans that will comprise much of the next wave of the negative equity plunge (only one in seven prime loans is currently underwater). And why’s all this negative equity so bad? “Bottom line,” writes Business Insider’s Henry Blodgett, “More negative equity will lead to more foreclosures.”
Half Of US Homeowners Will Be Underwater By 2011 [Business Insider]