Mortgage worries rise, poll finds

One in 7 mortgage holders worry they may soon fail to make their monthly payments and even more fret that their home’s value is shrinking, according to a poll showing widespread stress from the nation’s housing crisis.

In an ominous snapshot of how the sagging real estate market and sour economy are intersecting, the Associated Press-AOL Money & Finance poll also found that 60% said they definitely wouldn’t buy a home in the next two years.

That was up from 53% who said so in an AP-AOL poll in September 2006. Only 11% are certain or very likely to buy soon, down from 15% two years ago.

In today’s economic climate, even holding onto what they already have is a challenge and source of distress for significant numbers of homeowners.

Nearly 3 in 10 said they were concerned their home’s value would decline over the next two years, while 14% of mortgage holders worry that they might miss payments in the next six months.

One nervous homeowner is Daniel Gallego, a warehouse worker in Stockton, who said in a follow-up interview that he might have to sell his house at a big loss.

“We may have to move in with my wife’s parents or my parents,” said Gallego, 30, who has two young children.

“I could pay off some debt, then we could rent, and maybe buy another house in a few years.”

He said the rising cost of gasoline and other expenses had made his adjustable-rate mortgage unaffordable. Because he doesn’t expect his home’s value to recover soon, he said he might be better off moving now before his rates rose.

The number of people envisioning falling prices in their area has grown to 1 in 4, while 4 in 10 believe prices will rise, a decrease from two years ago. Expectations for rising prices are highest in the South, with Westerners likeliest to predict they will drop.

The poll also found:

* The biggest worriers are those expecting to buy soon. Of that group 43% frets that their home’s value will drop in the next two years, compared with 25% of those not expecting to buy soon.

* Fifty-nine percent believe now is a good time to buy.

* Half believe this is a very tough time for first-time buyers, an increase from two years ago.

Nearly two-thirds believe it’s harder for first-home buyers than it was five years ago.