The Wall Street Journal reports:
According to Moody’s Economy, one in six U.S. homeowners is now saddled with a home that is worth less than her mortgage. The plummet in home values increases the potential for foreclosures which results in greater economic pressure for an economy that is already on the verge of a recession, according to some.
Additional foreclosures can set off a wave of decreased home values, as a foreclosed home tends to lower values of neighboring homes. The current housing slump, which set off last year’s credit crisis, has decreased home valued by almost one-third in some areas, which accounts for over ten million households.