After a housing bubble bursts and causes home prices to fall, homeowners:
A) face higher prices on homes when they try to buy a new home.
B) are grateful that they own a high-value home because they bought when prices were high.
C) may owe more on their mortgage than the home is worth in the housing market.
D) will not benefit, but lenders will have lower loan default rates.

Question

Quizplus · Accepted Answer

After a housing bubble bursts and home prices fall, homeowners may find themselves in a situation where they owe more on their mortgage than their home is currently worth in the market. This is often referred to as being "underwater" on a mortgage.

After a Housing Bubble Bursts and Causes Home Prices to Fall