Has Housing Bottomed…Is The Great Housing Crash Over?
A follow up on this story..
Think we are at the bottom of the housing market and there will be a fast rebound in house prices….think again:
Americans fell behind on their mortgage payments at a record pace in the second quarter as job losses and falling real estate prices thwarted government efforts to stabilize the housing market.
Now, the staggering facts:
The share of loans with one or more payments overdue rose to a seasonally adjusted 9.24 percent of all mortgages, an all- time high, from 9.12 percent in the first quarter, the Mortgage Bankers Association said in a report today. The inventory of homes in foreclosure increased to 4.3 percent, the most in three decades of data, and loans overdue by at least 90 days, the point at which foreclosure proceedings typically begin, rose to 7.97 percent, the highest on record.
As we reported months ago on this blog…the problem is no longer just a ’sub-prime- problem….
“We’ve seen a significant drop in the problem with subprime loans and we’ve moved now to a problem with prime fixed-rate loans,” Jay Brinkmann, the Washington-based trade group’s chief economist, said in an interview. “Job losses are driving it, and we expect that to continue into next year.”
Homeowners fall behind on their mortgage payments when they lose their jobs, and declining prices mean they can’t sell to pay off loans, Brinkmann said. Companies have shed 5.7 million jobs since January 2008, the biggest employment loss since the Great Depression. The median U.S. home price fell 16 percent in the second quarter from a year earlier, the steepest drop on record, according to the National Association of Realtors.
The percentage of loans on which foreclosure actions were started was 1.36 percent, down from 1.37 percent in the first quarter, driven by the decline in subprime loans. New foreclosures on prime loans increased to 1.01 percent from 0.94 percent, while subprime loans dropped to 4.13 percent from 4.65 percent, Brinkmann said.
The delinquency rate for prime loans rose to 6.41 percent from 6.06 percent, and the share of prime loans in foreclosure increased to 3 percent from 2.49 percent.
Bottom line, more foreclosures and REO listings. Expect to see a significant increase in luxury home foreclosures. In other words, no housing market..no price segment is going untouched…Agents, its NOT too late for you to become a REO Listing Agent. Watch the FREE How-To List REOs video now.
Jobless Claims Rise
The number of people filing claims for jobless benefits unexpectedly rose last week, the Labor Department said today in Washington. Applications increased to 576,000 from a revised 561,000 the week before. Economists had forecast claims would fall to 550,000 from a previously reported 558,000, according to the median of 39 projections in a Bloomberg News survey.
U.S. banks raised requirements for all types of loans in the second quarter and said they expect to maintain strict criteria on lending until at least the second half of 2010, according to the Aug. 17 Federal Reserve Senior Loan Officer survey.
None of the 51 respondent banks eased standards on prime mortgages in the latest survey, while 39 said demand for home loans was about the same, moderately stronger or substantially stronger.
Housing starts unexpectedly fell in July, pulled down by multifamily dwellings, while single-family starts that make up 75 percent of the industry rose to the highest level since October, a Commerce Department report showed this week.
The 1 percent decline in starts to an annual rate of 581,000 was the first drop in three months and followed a 587,000 rate in June. Construction of single-family houses rose 1.7 percent to a 490,000 rate.
source: Bloomberg News.
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Prices in some markets may have hit a bottom. Prices actually increasd in the last quarter in Philadelphia. It doesn’t mean that prices will be increasing to previous levels any time soon.
The big problem in Philadelphia at the moment is the loss of revenue for the City – partly due to loss of real estate transfer tax revenue which is the highest in the country – together with the loss of revenue for the State and the inability of the State to agree to a budget. No revenue, no budget, programs will be cut, jobs will be cut…more pain.
I’m in the mortgage business, and I do know that there are several waves of foreclosures on their way due to adjusting ARMs and other exotic mortgages. Depending on where you live, it may be a lot worst than other areas. We’ll all just have to ride it out like a hurricane!
Obviously, the good thing about this is that there is a lot of opportunity for real estate agents, loan officers, real estate investors, and even first time home buyers. Go snatch up these foreclosures and REOs. I’m trying to get my share to secure my future!