Housing News

Latest Foreclosure Stats Speak of Shaky RE Future

More homeowners move, more houses on sale

The Mortgage Bankers Association released the MBA National Delinquency Survey last week and came up with distressing results as expected. Foreclosures rose 30 percent in the first quarter where one out of every 70 home loans has gone sour. The overall delinquency rate (loans that are at least one payment past due combined with those in the process of foreclosure) also shot up by 9.12 percent from 7.8 percent in the 4Q08. According to the company’s chief economist Jay Brinkman, “Now that the guidelines of the administration’s loan modification programs are known, combined with the large number of vacant homes with past due mortgages, the pace of foreclosures has stepped up considerably… The foreclosure rate on prime fixed-rate loans has doubled in the last year, and, for the first time since the rapid growth of subprime lending, prime fixed-rate loans now represent the largest share of new foreclosures… What has not changed, however, is the oversized impact of California, Florida, Arizona and Nevada in driving up the national numbers. Those states continue to account for about 46 percent of the foreclosure starts in the country, and represented 56 percent of the increase in foreclosure starts, including half of the increase in prime fixed-rate foreclosure starts.”

One interesting note in the results is that most affected homeowners have or had jobs that are impacted by the drowsy housing market. Their incomes would adversely react to the plummeting home values every time results like this are released. For example, the Bureau of Labor Statistics reports that Florida has a total of 7,451,000 workers where 5.7 percent work in construction, 6.8 percent are in the financial services, and 14.35 percent are employed in the professional and business services. However, the April unemployment rate stands at 9.1 percent compared to last year’s 4.9 percent. The MBA on the other hand, announced that 10.6 percent of mortgages in the state are already in the process of foreclosure. These are alarming numbers indeed.

This second quarter, we’re expecting worse effects of the fall in home values to employment in the states of Alabama, Arkansas, Louisiana and Texas. They may not have the huge drop in employment like in Mississippi but their foreclosure rates are sure to drag down living conditions.

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