Nearly 1 in 6 Homeowners Underwater

Here's the central problem in the credit crunch that has gripped the world. Housing prices keep falling and the news doesn't get any better. The WSJ just published an article that says that 1 in 6 homeowners owe more on their mortgage than their home is worth.

"The result of homeowners being "under water" is more pressure on an economy that is already in a downturn. No longer having equity in their homes makes people feel less rich and thus less inclined to shop at the mall.

Until this has run its course nothing the governmnet does will really solve the problem. The bubble has burst.

Of course, there is a bright side. If you are a first time buyer or were wise enough to wait out the housing bubble, you'll get a much better price on a house. You just need to make sure you can get a mortgage.