[Mistletoe]

https://fred.stlouisfed.org/series/MSPUS

It's difficult to be underwater when the curve looks like this. It would mean just buying extremely recently. Give it time. This recent jump was unprecedented.

Q2 2020 322k

Q3 2022 456k

34% in two years

Closest analog is the jump before total meltdown in the 2008 housing crisis.

Q3 2003 192k

Q1 2007 257k

28.9% in four years

This entire move was pretty much retraced in the following two years. Imagine the carnage if the most recent move retraced similarly.

[metaphor]

Nominal terms may not be the best way to look at it.

Here's a more intuitive visualization[1] of just how ridiculous the situation is.

The at-a-glance takeaway is that those who bought anytime from 2021 and today are, on average, almost certainly holding an illiquid bag that's even more overvalued than the inflation-adjusted peak of the housing bubble leading into the GFC.

The original Black Knight press release[2] cited by the article highlights:

> Of all homes purchased with a mortgage in 2022, 8% are now at least marginally underwater and nearly 40% have less than 10% equity stakes in their home, a situation most concentrated among FHA/VA loans

> More than 25% of 2022 FHA/VA purchase mortgage holders have now dipped into negative equity, with 80% having less than 10% equity

In other words, low income and veteran home buyers. What I'd like to know is what percentage of these homes were financed with adjustable-rate mortgages...based on the implied trend, those people are liable to be sucking hind tit sooner than later.

As for those with fixed-rate mortgages that are able to continue making payments, being underwater just means less future business for Black Knight...soon to be ICE's problem if/when the acquisition closes next year.

[1] https://fred.stlouisfed.org/graph/?g=kYEb

[2] https://www.blackknightinc.com/black-knights-october-2022-mo...

[Gibbon1]

> What I'd like to know is what percentage of these homes were financed with adjustable-rate mortgages...

I bought a house in the last couple of years and then refinanced it a couple of times. I can say the interest rate spread between an ARM and fixed was not very much over the last 5 years. So I'd assume not many were issued.

[nunez]

i don't know about ARMs but I worked at a WeWork for a bit next to a mortgage lender and they were talking people into getting mortgages against their 401(k)s...

[indemnity]

In my country (New Zealand), you can withdraw all except NZ$1000 from your retirement savings (usually only available at 65), if you are a first home buyer, to help you get into the market.

You can imagine how that went.

[vineyardmike]

In the US you can borrow against something like $50k of it, but you do need a payment plan (with interest) IIRC. And you have account minimums and its only for certain purposes... etc. Thankfully our 401ks are safe from this for now.