Foreclosures Rising
Take a look at the chart.
And we're not at the peak yet!
According to The Economist...
Nationally, people are defaulting on mortgages at a faster pace than at any point in recent decades. According to the Mortgage Bankers Association, some 5% of all mortgages are delinquent and the share rises to almost 15% for “subprime” mortgages—those lent to people with shaky credit histories. In the second quarter of 2007, almost 3% of subprime loans entered foreclosure (the process of default and repossession). RealtyTrac, a company that tracks foreclosures, reckons up to 1.5m households will enter the process this year (see chart), double last year's figure. And with some 2.5m adjustable-rate mortgages resetting to higher rates before the end of 2008, everyone knows there is much worse to come.
I think we will not see a recovery in housing till at least 2009. But in housing, everything moves slowly. So this downturn might not be over well after 2010.
Reference
The hummer drops, The Economist
Comments
· October 8, 2007 · comment by TSmith
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Housing - not a pretty picture
I work for CurrentForeclosures.com a foreclosures site, and our company has been aware of the impending foreclosure issues for months. In my opinon the contributers to the failing real estate market are subprime mortgages and ARM's that are causing homeowners that should not have qualified for a home loan in the first place to face foreclosure, the depreciation in housing prices (especially as foreclosures flood the market!) and the fact that so many are unable to sell their homes. More and more research shows that the housing market will not recover until at least next year, and it will most likely take years to get us back to where we were before the bottom fell out. The Fed interest rate cut helped some, but if they truly want to help struggling homeowners they need to make further cuts and write legislation that prevents borrowers from being taken advantage of by shady lenders.