Most struggling homeowners are 40, younger

PHOENIX — A new report from the online real estate database Zillow said the nation’s housing market is recovering but more than half of the homeowners under the age of 40 are underwater on their homes.

Valley consumer-finance expert Dean Wegner said there’s no mystery why younger borrowers are more likely to be underwater.

“The majority of people bought as first-time home buyers, they had little down payment, they did government financing, which is traditionally a lower down payment and when the market tanked, they were automaticallyately upside down,” Wegner said.

Homeowners who are grossly upside down on the home and have a second mortgage, might want to consider a short sale or foreclosure, said Wegner.

There is also a third option.

“The rental market is red hot and even if you have to lose $100-$200 a month, probably in the next three to six years, you’ll be even or have some equity,” Wegner said.