Home equity dips

I just saw a story on cnn.com in which the Federal Reserve has announced that for the first time on record (since 1945) the percentage of equity in American homes is less than 50%.

This means that people's homes are worth less than what they owe on them.

The most disturbing part of the article:

"Economists expect this figure to drop even further as declining home prices eat into the value of most Americans' single largest asset.

"Moody's Economy.com estimates that 8.8 million homeowners, or about 10.3% of homes, will have zero or negative equity by the end of the month. Even more disturbing, about 13.8 million households, or 15.9%, will be "upside down" if prices fall 20% from their peak.

And there are people out there who say we're not in a recession.