If the US is going the japanese road, then you can look at how the housing market there recovered. Let’s see, the peak was in 1989. the current price is still about 60% (?!) below that peak.
I can only hope you good luck if you decide keeping the mortgage.

If the US is going the japanese road, then you can look at how the housing market there recovered. Let’s see, the peak was in 1989. the current price is still about 60% (?!) below that peak.
I can only hope you good luck if you decide keeping the mortgage.

24% down implies that you took a loan of about 517K.
On a 30-year fixed over 3 years the principal should be about 500K now.
You are only underwater by about 80k. No matter what you do, the down payment is currently lost. Some might suggest that you walk away, but the “benefit” (80K) of short sale or deed-in-lieu may not be worth it in my opinion.

A couple of pieces of information that I would use to judge your situation objectively :
1. What would the house rent for ?
2. What area/neighborhood ?

Given answers to these two questions would give us a feel for the downside and upside potential.

24% down implies that you took a loan of about 517K.
On a 30-year fixed over 3 years the principal should be about 500K now.
You are only underwater by about 80k. No matter what you do, the down payment is currently lost. Some might suggest that you walk away, but the “benefit” (80K) of short sale or deed-in-lieu may not be worth it in my opinion.

A couple of pieces of information that I would use to judge your situation objectively :
1. What would the house rent for ?
2. What area/neighborhood ?

Given answers to these two questions would give us a feel for the downside and upside potential.

24% down implies that you took a loan of about 517K.
On a 30-year fixed over 3 years the principal should be about 500K now.
You are only underwater by about 80k. No matter what you do, the down payment is currently lost. Some might suggest that you walk away, but the “benefit” (80K) of short sale or deed-in-lieu may not be worth it in my opinion.

A couple of pieces of information that I would use to judge your situation objectively :
1. What would the house rent for ?
2. What area/neighborhood ?

Given answers to these two questions would give us a feel for the downside and upside potential.

As Rich’s investment site notes (in “US Not Going Down Japan’s Road” on the right hand column at the top), it’s not likely we’re in for a Japanese scenario. This will be a different kettle of fish here – the Japanese chose not to inflate their way out of their mess. We, on the other hand, are clearly choosing to inflate our way out of ours.

Regardless, over the long run (>40 year timeframe), housing has appreciated at no more that the rate of wage inflation (historically, about 3.5% per year averaged over the long term). 5% is indeed optimistic, but possible as we’re probably headed for a period of serious inflation, which will eventually (although not at the start, when inflation will primarily strike commodities, thus increasing cost of living) have the likely effect of inflating wages as well.

As Rich’s investment site notes (in “US Not Going Down Japan’s Road” on the right hand column at the top), it’s not likely we’re in for a Japanese scenario. This will be a different kettle of fish here – the Japanese chose not to inflate their way out of their mess. We, on the other hand, are clearly choosing to inflate our way out of ours.

Regardless, over the long run (>40 year timeframe), housing has appreciated at no more that the rate of wage inflation (historically, about 3.5% per year averaged over the long term). 5% is indeed optimistic, but possible as we’re probably headed for a period of serious inflation, which will eventually (although not at the start, when inflation will primarily strike commodities, thus increasing cost of living) have the likely effect of inflating wages as well.