Dennis Norman
The national rate for seriously delinquent mortgage’s (mortgages that are 90+ days delinquent) increased in January as well to a rate of 8.66 percent, an increase of 56.6 percent from a year ago when the rate was 5.53 percent.
So while we are seeing some markets in the US showing signs of “hitting bottom” and some are evening saying some markets have begun a “recovery“, I think we should be very slow and cautious to say the worst is behind us. Perhaps for those markets that had extremely high concentrations of the foreclosure activity (Nevada, Arizona, California and Florida) most of the damage may be done, but for other markets foreclosures are going to continue to put downward pressure on home prices. Until mortgage delinquency and foreclosure rates start trending downward significantly we cannot underestimate their impact on the market.
In addition, with the Fed Reserve’s announcement of their plan to discontinue the purchase of mortgage-backed securities in the next month or so, many in the industry feel this may lead to higher interest rates. With the housing market already struggling, higher interest rates will be yet another blow.
So, in my humble opinion, what we need to happen before we are going to see a true recovery begin in the housing market is; interest rates to hold reasonably steady or at least not increase significantly, foreclosure and mortgage delinquency rates drop back closer to normal levels, and unemployment to drop significantly from the current levels approaching 10 percent.
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It’s amazing a year later we are still having some challenges. But I do think we are starting to turn a corner.
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