real estate

This Couple's Patience Helped Them Survive the Housing Bubble

Rather than try to sell a home with an underwater mortgage, they stuck it out until they could eventually turn a profit.

Then: Home prices were still falling in late 2010 when we met Shannon and Al Becker, both 39, of Norwood, Mass., southwest of Boston (pictured above). Like nearly one-fourth of all U.S. homeowners, they were underwater—that is, they owed more on their home than they could get by selling it. But the couple never considered walking away. As Al put it, "That would be un-American, and my parents would kill me." Their plan? Wait it out.

Instead of prepaying their loans to build equity more quickly, the Beckers stashed money in their retirement accounts, advanced in their careers and waited for home prices to rise. By 2015, they had regained enough resale value to cover their mortgage debt, a real estate agent’s commission and a down payment on their next home. Hoping to cash in on a strong sellers’ market, they spent the spring of 2016 spiffing up their house; they listed it in June for $389,000. After the first weekend, they received two offers and accepted one for $395,000.

Meanwhile, an acquaintance referred the Beckers to a for-sale-by-owner home on a quiet street in a desirable neighborhood near the girls’ schools. The Cape Cod–style home had a finished basement that the girls could use as a playroom now and a hangout later, as well as a swimming pool that was perfect for entertaining. The couple got the house when they offered the full asking price of $517,000 (to avoid spooking the owners by offering less). They put down 10% and took out a 30-year loan with a fixed rate of 3.75%. “I just laughed at that rate,” says Al. “We bought this beautiful house with a better location for more money, and my monthly mortgage payment is actually $100 less than before.”

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