GUY RAZ, host:
This is ALL THINGS CONSIDERED from NPR News. I'm Guy Raz.
If you bought a home between 2004 and 2007, you may have been given the following advice:
Ms. DAWN CROWELL: You need to invest in your future. This is a great investment. It might be painful for a while, but it's a great investment.
RAZ: That's Dawn Crowell from St. Paul, Minnesota who, like millions of Americans, has seen the value of her home plummet. Now over the past four years, Americans have lost more than $5 trillion in wealth that was tied up in their homes. And some economists, including one who we'll hear from in a moment, say that house prices might still be too high, overvalued by as much as 30 percent.
We begin the hour with a look at the state of housing. But first, back to Dawn Crowell who decided to become a homeowner in 2004.
Ms. CROWELL: I was recently divorced and have four children. And it seemed to me, from the advice of everyone I came in contact with, whether it was friends, people at church, everyone said I needed to get into a house. I needed to buy a house. It was the best thing I could do for my financial future.
RAZ: At the time, Dawn and her four kids lived in a two-bedroom apartment in St. Paul.
Ms. CROWELL: All of us getting ready in one bathroom was quite interesting and it was chaotic. And we were always on top of each other. So the thought of a house, where we would have space, was just, you know, an amazing thought to us.
RAZ: But with her modest salary, she wondered whether she could afford it.
Ms. CROWELL: Single mom, no finances, no - you know, I really had nothing. And the thought of having a house was just ridiculous to me until I started to look.
RAZ: And soon enough, things started to fall into place.
Ms. CROWELL: The real estate agent was amazingly helpful. You know, her best friend was a broker and was able to help find a loan, and it all became a reality very quickly and very easily.
RAZ: Despite having a weak credit record, Dawn got the loan and she ended up buying the house. The mortgage took up about 75 percent of her monthly income. She says it was a struggle, but she managed with help from her parents. That is until recently when she stopped paying.
Ms. CROWELL: In May of this year, I lost my job and been looking furiously, but I still am unemployed. And the letters are starting to come in saying, okay, well, we are going to have to foreclose.
RAZ: She can't sell the house because she owes more on it than it's worth. So, Dawn, like a lot of people across the country, is wondering whether she bought into an idea that was false - the idea that a home will only increase in value. Transcript provided by NPR, Copyright NPR.
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