calculated risk says 23% of borrowers are underwater. His commenters note, correctly, that it’s more like 10% of the roughly 100,000,000 “homeowners,” because that 23% ignores the people who have actually paid off their mortgages or otherwise own their homes outright.
But still: 10% of households underwater is a big problem!
There are only two reasonable solutions. The first is for Treasury to trash the dollar and just keep on printing currency until we’re all rich enough to afford to buy real estate at 2005 prices. The other is to have some kind of massive nationwide program to cram down housing debt, whether through bankruptcy or some other system. There really isn’t a third option, and wishing for the unicorns to save us by sending more troops to Afghanistan isn’t going to make the problem go away.