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Saturday, September 28, 2019
Being " Underwater " on Your Mortgage Reduces Your Earnings
January 07, 2014
Economic Fact
Being " Underwater " on Your Mortgage Reduces Your Earnings !
USA example :
Why has wage growth been anemic in the current U.S. economic recovery, despite strong productivity gains?
One reason may be that many homeowners have owed their banks - MORE than their homes are worth, and being underwater on a mortgage depresses earnings .
Specifically, having mortgage debt that EXCEEDS the home price lowers one’s current earnings by 3.7% .
Reason ?
Apparently because underwater homeowners accept lower wages to avoid job loss, which could lead to mortgage default.
Research conducted by :
SOURCE: Negative equity and wages
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