When Dan Bondanza, 30, bought his first home he believed he was making the responsible decision.

“I bought a house so I could build an asset. Then the market fell apart.”

Bondanza is one of the 9.7 million or 19.8 percent of residential homeowners in the U.S. that are underwater on their mortgages, according to a June report in the Wall Street Journal. A housing boom from 2004 to 2006 inflated the housing market until the air was let out in the fall of 2007. Unfortunately, buyers during that span were left with homes that were worth less than what they actually owned on their mortgages.

Like his parents and generations before him, homeownership was one of the key steppingstones to adulthood and the cornerstone of the American dream.

“(Our parents) bought a smaller house then lived in it until they couldn’t live in it anymore. And then they went with a bigger house and then a bigger house, (etc.),” he said. “I bought my house at the top end of the market unfortunately.”

In 2007, Bondanza purchased his 1,000 sq. ft. house for about $140,000, which was in his words, “a hell of a deal” at the time. The plan was to start small and find a bargain then build equity and move on, he said.

“I figured I would be here at most three years and then be able to sell for close to $200,000 with the way (the market) was going,” he said. “And then…the market tanked.”

“The next thing I knew I was underwater on my mortgage very quickly.”

In Pennsylvania alone, there are roughly 1.9 million home mortgages that total just over $252 billion dollars. Of these mortgages, 9.6 percent are currently underwater, causing home values to drop 7.7 percent after values hit their peak in the mid-2000s, according to data collected in February by Marketplace.org.

“Now today because the market is so poor you can buy a really nice house right from the start, but when I got in I bought a smaller house.”

After graduating from West Chester University, Bondanza quickly found employment teaching honors mathematics at Sun Valley High School in Aston, Pa. With steady employment assured, Bondanza figured it was a perfect time to invest in a home.

“I bought a house. I didn’t want to piss away my money renting anymore.”

By all indications Bondanza did everything he was supposed to do. He went to college, earned a degree, found success in a steady job and bought a starter home.

“I thought the whole thing was you bought a starter home and then you flipped it. Then you bought a little bit bigger home then flipped it. You built up that way,” he said.

So, where did it all go wrong?

“There has been a drastic change in (the market) the last few years,” said Susan Evangelista, a New Jersey realtor of 37 years. “Because of the market, most people who bought a house in the last five years are underwater.”

Recently, Evangelista helped close a “short sell” deal on a house in Roselle, N.J. for $140,000 less than seven years after it was purchased by the same owner for $525,000. It’s one example of homeowners across the nation that have seen their homes values shrink in half since the housing bubble burst.

“Fortunately, interest rates have dropped to rates that haven’t been seen in nearly 40 years,” Evangelista said.

“The interest rates are back where they were, but it’s harder to get (approved) for a loan now.”

While current interest rates might be at their lowest in years, the cost of houses is still astronomical in comparison to past decades.

Median home values adjusted for inflation nearly quadrupled over the 60-year period since the first housing census in 1940, according to recent date from the census report. In 1970 the median home value in the U.S. stood at $65,300 which would eventually balloon to $119,600 in 2000.

For example, Evangelista purchased her New Brunswick home in 1976 for $45,000. She estimates that even in today’s rough economy the same house would list for about $200,000.

Evangelista’s own property taxes have increased nearly 700 percent since she moved in nearly four decades ago. “Higher property taxes have made it harder for struggling homeowners to avoid default,” she said.

“That’s the way it is now. The economy is different. Also, job stability isn’t what it used to be,” she said. “It used to be you worked until you were 65 then retired with social security. Many people don’t have that option anymore.”

Unfortunately, outside of refinancing through the Home Affordable Modification Program – the White House’s signature effort to assist struggling borrowers in the wake of the financial crisis and Great Recession — or using the short sell, there aren’t many options for homeowners trapped by their mortgages.

Bondanza’s two bedroom home sits along a quiet street in the tiny neighborhood of Parkside just outside the city of Chester. “It was the nicer end of the cheaper area.” However, as the economy worsened many living in middle class homes like Bondanza’s quickly saw their home values plummet.

“The gap between the lower and middle classes closed substantially and all of a sudden all those houses that were in nicer neighborhoods on the boundaries are no longer the case,” he said. “It’s like there is upper class and then everyone else.”

Bondanza’s housing woes are also compounded by cutbacks at work. Like many states across the nation, Pennsylvania public schools are facing increasingly tighter budgets which may lead to problems as Penn-Delco’s contract with teachers expires next year.

In the end, the district will eventually be forced to raise taxes again on residents.

“The district that actually pays me will continue to charge me more money as I earn less money.”

In January, Bondanza began saving roughly $250 after refinancing his mortgage through HAMP.

“That was a pretty big help,” he said. “But there was about four years where, because of increased taxes, my mortgage kept going up and up and up but the value of my house was going down and down and down.”

However, since the program essentially requires homeowners to reinvest for another 30 years Bondanza may find it difficult to sell when the time comes.

“In the short-term it looks like a good deal but at the end of the day I’m now back in for another 30 years of my house,” he said. “You take it because it’s a great deal right then and there, but you’re just praying that it will work out for you in the long run.”

Bondanza compared the deal to a two-year cellphone contract. While that new iPhone may look attractive now, its technology will certainly be outdated before that contract expires.

“If you take HAMP, that’s it. You get the one bailout,” he said. “If (HAMP) doesn’t work out for me, that’s it. I’m done.”