Phoenix Underwater Mortgages Show Housing’s Threat to Recovery

Christine Johnson has reduced her spending on clothes, travel and home improvements -- all so she can stay current on the house she bought in Phoenix at the peak of the housing bubble.

Johnson, 44, a professional photographer, owes $330,000 on a ranch home that she says might fetch $270,000 in today’s market. She’s also about $70,000 underwater on a rental property. “I’m nervous now. How am I going to make enough money to pay everything on time?” the single mother said in an interview. “I used to be able to spend money on clothes. I don’t buy anything anymore.”