Lower House Values Lowers the Divorce Rate

Lowering house values are saving marriages! Well, maybe not but they are making people post-pone getting the actual divorce. During the boom all one needed to do was pull some equity out to pay for the divorce. Now, that is not so easy. So the housing bust is making people put off the inevitable. Will the results of this be better or worse? Who knows? But this article from the Chicago Sun Times titled Housing market keeping couples together. Lets take a look -

Divorce is rarely an easy process, and falling home values and sluggish real-estate sales are combining to make it particularly difficult right now.

Couples aren't fighting over who gets to keep the house. They're scrambling to get away from the burden of it. It's too soon to see the trend in official statistics; the most recent marriage and divorce numbers compiled by the National Center for Health Statistics date back to 2005 -- just when real-estate markets started to turn down from their boom years.

But lawyers and financial planners anecdotally say they are seeing more clients staying married -- if only for the time being -- simply because they cannot afford to break up.

...
If the home's value has fallen below the amount owed on the mortgage, neither spouse wants to be saddled with that liability. If one wants to keep the home, it's difficult to refinance the mortgage so the departing spouse can be cut loose from the debt. And evaporated home equity can take with it the means to pay lawyers for the divorce itself.

Dan Couvrette, chief executive officer of Divorce Marketing Group, a Canadian company that publishes Divorce Magazine, said he's also hearing anecdotally that some couples cannot afford to divorce. ''One of the ways they pay their legal fees is by selling or refinancing their home, and selling the home is getting is more difficult,'' he says.

Hopefully we remember in a few years when we see a decline in divorce rates that the couples are probably not together in any meaningful sense. They just do not have the funds to cover a divorce. Instead of fighting over who will get the money couples instead are fighting over who gets burdened with the most debt.