Here's a graph from Calculated Risk, based on new numbers the Fed released today:
Here's the story the graph tells: Americans borrowed trillions of dollars to buy houses during the boom. The value of the houses has plummeted, but mortgage debt has only gone down a little.
Not surprising — the size of a mortgage doesn't rise or fall with the value of a house — but still worth noting.
This is why nearly a quarter of mortgage borrowers are underwater and nearly a third of existing home sales are foreclosures or short sales. It's why the housing bust is still dragging out after five years. And it's why some economists are suddenly talking about the upside of inflation.