The number of U.S. homes entering the foreclosure process because of nonpayment on mortgages rose to 130,511 in January, 25% more than in January 2006, according to data released Monday by Realtytrac Inc.
The foreclosure rate was one for every 886 U.S. households.
The 130,511 foreclosures is the highest monthly total since the firm began tracking national foreclosures two years ago. Foreclosures were up 19% compared with December.
This data set is only two years old, so reading too much into it is a bit dangerous. But, 25% is a big jump and too large to be considered statistical noise.
I also wanted to add that if memory serves, the national foreclosure rate is still pretty low by historical standards. If someone has a chart on an exact figure, please chime in.
4 comments:
You know dude there is more to the US economy and the bond market than just the housing market.
You know dude there is more to the US economy and the bond market than just the housing market.
In this recent growth period of the economy, the vast majority of jobs have been real estate related or public sector. There's been minimal growth in other aspects of the private sector.
So while you can truthfully say that the bond/housing market isn't the be all end all of the economy, it has pretty much been the be all end all of our recent period of supposed growth. I say supposed because the whole thing was fueled by cheap money set up by fed policies and lax loan rules.
So that's why it's such a huge problem. Dot com stocks weren't the entirety of the economy in the late 90's but damn if those didn't lead the way into a recession in 2000.
The question I have in all of this is how interest rates are likely to be affected by all of what's going on. I would think that a collapsing housing market should lead to lower interest rates due to lower demand for loans.
It seems to me that the big thing keeping interest rates low right now is international demand for US treasuries. So I expect when that demand tapers off, which it eventually will, we'll see an increase in rates, though it's not clear how much or when.
My concern has been that we'd see high interest rates leading a housing down turn. That on top of over supply we'd have serious downward pressure on prices due to higher borrowing costs. While that's true to an extent right now I don't get the sense that it's the majority of the problem. We just appear to have an oversupply of property, particularly in the higher end segment of the market.
So any thoughts on this?
I actually don't think the biggest problem we have right now is the oversupply of property but rather the oversupply of dollars.
In fact, relative to dollar supply dollar demand has been waning for many years, forcing foreign central banks to be the buyers of last resort.
Also, one may argue that the "so called" housing bubble was a very natural reaction by people to protect themselves from dollar devaluation. Of course, it got crazy at the end there in 2005.
Median housing prices denominated in Gold are not historically very expensive.
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