Debt Outpacing Home Value

The San Jose Mercury News reports that 8.8 million homeowners owe more than their house is worth.

For the first time since the Federal Reserve started tracking the data in 1945, the amount of debt tied up in American homes exceeds the equity homeowners have built.

The Fed reported Thursday that homeowner equity actually slipped below 50 percent in the second quarter of last year, and fell to just less than 48 percent in the fourth quarter.

And the housing industry's woes only seem to be getting worse.

Also Thursday, the Mortgage Bankers Association said foreclosures hit an all-time high in the final quarter of last year. And pending U.S. home sales — those in the gap between when a buyer signs a contract and when the deal closes — came in below analyst expectations for January and remained at the second-lowest reading on record.

"There is no sign that we're near the bottom in the housing market," said Douglas Elmendorf, a senior fellow at the Brookings Institution