Record high mortgage delinquency rate
You can read the gory details of our current real estate situation in THIS article, and I recommend you do. One remarkable lowlight: For the first time in history, the number of home loans which are 90-or-more days delinquent or in foreclosure is now, at 4 million, higher than the number of new and existing homes for sale.
The article quotes the chief economist of the Mortgage Bankers Association: “The outlook is that delinquency rates and foreclosure rates will continue to worsen before they improve. First, it is unlikely the employment picture will get better until sometime next year and even then jobs will increase at a very slow pace. Perhaps more importantly, there is no reason to expect that when the economy begins to add more jobs, those jobs will be in areas with the biggest excess housing inventory and the highest delinquency rates. Second, the number of loans 90 days or more past due or in foreclosure is now a little over 4 million as compared with 3.9 million new and previously occupied homes currently for sale, although there is likely some overlap between the two numbers. The ultimate resolution of these seriously delinquent loans will put added pressure on the hardest hit sections of the country.”
One mitigating factor in all this: Just four states (Nevada, Arizona, Florida, and California) are responsible for fully 43% of last quarter’s foreclosures. From the article: “They had 37 percent of the nation’s prime fixed-rate loan foreclosure starts and 67 percent of the prime ARM foreclosure starts. As of the end of September, 25 percent of the mortgages in Florida were at least one payment past due or in foreclosure.”
So, to the extent that real estate is a much more local market than, for example, a stock market, the news isn’t necessarily as bad for Colorado and the rest of the nation as it is in those wildly speculative “sun belt” markets.
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