AlphaNinja - This morning's existing home sales data was better than expected. The market loved it, as did the White House, which commented that housing was "bottoming."
Maybe it has, but I doubt it. Below is a snapshot from a report on negative equity among mortgaged homes, courtesy of First American Corelogic. They note that as of JUNE, 32% of mortages are underwater, and another 2.5million are not far behind, psoosibly pushing the number to 38%.
And that's as of June. We're likely headed towards at least a 50% number. The report doesn't mention it, but I would speculate that the majority of underwater mortgages were from the "vintages" of 2006-2007, so we're not looking at half of babyboomers' nest eggs being wiped out, fortunately. One thing is certain however -->> a lot of the loans on banks balance sheets will turn out to be wildly overvalued right now.