The mortgage crisis has become a major talking point for both presidential candidates. The media is rightfully covering its cause, current dilemma, and projected aftermath. In fact, it’s pretty difficult to go anywhere, save a Realtor’s office, without hearing about how the decades-old American dream of accruing wealth in equity has become more of a bait-and-switch game for homeowners. Home values are plummeting, and economic experts insist it’s going to get worse before it gets better. So how is it that 62 percent of homeowners believe their home values have increased or stayed the same in the last year?

 A preliminary report released by Zillow.com yesterday reveals that a majority of homeowners still have high confidence in their home’s value, despite serious evidence to the contrary. Seventy-seven percent of U.S. homes lost value in the last 12 months, according to Zillow’s report, yet 62 percent of the 1,361 surveyed believe their home is immune to the meltdown. Here in the Midwest, 39 percent of respondents surveyed believe their home values actually increased this year, when the reality is that only 18 percent of homes had an increase in value.

These misconceptions wouldn’t be a big issue if they were just simple illusions with no repercussions for the homeowners or the economy. But 17 percent of those surveyed say they plan a major home-improvement project (replace roof, remodel kitchen) in the next six months, projects that will cost big bucks and, for those homeowners who think their home is impervious to declining prices, have little or no return for those looking to sell in the next couple of years.