Several paragraphs into an informative Wall Street Journal story on why the housing market isn’t boosting the U.S. economy, there was an incredible factoid.
The percentage of homeowners who are underwater — that is, owing more on a mortgage than the home is worth — is 8.7%, down from 21% at the end of 2011, according to CoreLogic. However, the percentage of homeowners who believe they are underwater is 27%, according to separate data from Fannie Mae.
That perception may be one reason so few homes actually are on the market. The National Association of Realtors on Monday reported that inventories fell another 2% in October, and remains well below historical levels when compared to the sales pace.
The Journal article also explains that, while housing wealth has doubled from the bottom in 2011, Americans by and large aren’t tapping into this wealth. Separate data from Moody’s Analytics show that every $1 rise in home equity adds about 2 cents to consumer spending — about a third of the impact before the housing bust.