Horror of horrors.

Ten million Americans remain “financially trapped” by their homes.

That’s the siren call of economists for both the federal government and real estate firms that profit off home sales such as Zillow.

We are told because 10 million Americans have homes worth less than their mortgage debt it is a drag on the economy. In terms meant to scare people that means they are “underwater.”

The term “underwater” conjures up a nice mental image of homeowners struggling to keep their nose above a sea of debt threatening to drown them financially.

Zillow reports 18.8 percent of Americans with mortgages — of 18.8 percent — owe more on their home than it is worth. Another 9 million have equity but it is not enough to go out and buy a bigger home. In other words, the American Dream isn’t to own a home it’s to be a serial home buyer. That means Zillow believes you should keep trading homes for a bigger debt and bigger expenses such as taxes and energy bills.

Zillow obviously benefits from more fish in the water for potential buyers to hook as do builders and real estate agents.

But when government economists start saying it is a drag that tells you our national economic policy as well as our personal values might be a bit skewed.

Economists — and the real estate industry — like to see a lot of frequent buying and selling. The economists say it stimulates the economy while it keeps a steady and growing paycheck coming in for the real estate industry.

But does a constant churn of ownership create real wealth — a true measure of economic prosperity?

A quick survey of three other people I know plus myself who bought homes in Manteca to reside in back in either 2008 or 2009 are all underwater.

Not one of them feels economically stressed about it. Everyone figures they are spending a quarter or less of their income on housing.That’s considered a healthy sign by most standards. Only one has given any thought to buying another home. He and his wife have been told they’d get $14,000 or so less than what they owe on their home. Even so they are still trying to move up as they have been told they could handle a loan that would cover what they owe plus get them into them a bit bigger home that they want for their growing family. 

While none of the three wanted to provide dollar figures, they all indicated they don’t fret at night about owing more than the market says their home is worth. They mentioned several reasons including their belief in a year or so the shortfall in value will disappear, they have steady incomes, and regardless of anything else they are paying less a month today buying a home than when they were renting six years ago.

They all say they have more money to spend today while their income has stayed relatively flat.

As such they’d rather be “underwater” than not have a mortgage.

In my case, there is now only a $40,000 gap between what I owe and what the tax assessor says my house is worth. At one time it was $98,000. I guess I’m $58,000 better off but in reality what my home is worth in terms of equity is funny money. It doesn’t translate into real money until you go to sell.

Consumers, by the way, are underwater most of the time on their car loans.

You noticed economists don’t wail because you drive a new car off the lot that immediately drops a couple thousand dollars in value meaning you owe less than the vehicle is worth.

Unless some unforeseen event forces them to sell, most homeowners underwater have debt they can handle fairly easy meaning they are more high and dry than drowning.