The percentage of U.S. residential mortgages in foreclosure rose 5 basis points from the fourth quarter of 2009 to 4.63 percent in the first quarter of 2010, up 78 basis points on a year-over-year basis. New foreclosure actions rose 3 basis points in the first quarter to 1.23 percent of loans, down 14 basis points versus the first quarter of 2009.
The non-seasonally adjusted delinquency rate increased 151 basis points for prime fixed loans, 172 basis points for prime ARM loans, 343 basis points for subprime fixed loans, and 244 basis points for subprime ARM loans from the first quarter of 2009. The delinquency rate was 48 basis points lower for FHA loans and 12 basis points for VA loans relative to the same quarter a year ago.
The non-seasonally adjusted foreclosure starts rate increased eight basis points for prime fixed loans, 36 basis points for FHA loans and 17 basis points for VA loans compared to the first quarter of 2009. The rate decreased 22 basis points for prime ARM loans, 10 basis points for subprime fixed loans, and 259 basis points for subprime ARM loans on a year over year basis.
The percentage of seriously delinquent loans (90+ days past due) fell 13 basis points from the fourth quarter to 9.54 percent, up 230 basis points on a year-over-year basis.
∙ Delinquencies, Foreclosure Starts Increase [mbaa.org]
Extend and Pretend being churned little by little by the relentless effects of economic readjustment, unrealized RE rebound and the fact that Millions over Millions of homedebtors will stay underwater in the foreseeable future.
Some people just give in by choice, while others don’t have that luxury…
Regarding an “unrealized RE rebound and the fact that Millions over Millions of homedebtors will stay underwater in the foreseeable future”, from The Wall Street Journal, also today:
I’m not sure I agree with the bullish stance, but it’s at least worth noting, especially since The City is squarely in the “more desirable areas” category.
That’s assuming that SF’s market is in a perfect void. From what 2009 showed, it is not. I hear a colleague’s daily complaints of how his $1M starter family condo drags his family down (appreciation from a 2007 purchase did not pan out as he expected) and that he would move out 10 miles south and cut his expenses in 2 or even more.
^These are the “economists” for whom every piece of bad news in the last 6 years has been “unexpected”?
You are safer assuming the opposite of their “predictions”.
I don’t think we can assume that 100% of what these negonomists predict will turn out exactly upside down. They’re the famous broken clock, therefore expect them to be right maybe twice in the next few years.
They sure have been clueless. That’s what happens when people who are employed to perform checks and balances are also paid by the industry they are monitoring. Suddenly there’s an oil spill and much hoocoodanode excuses being thrown around.
The survey was conducted by a firm that Robert Shiller co-founded. It interviewed economists all up and down the line. Shiller himself called 12% “plausible.” Tipster pans everything remotely bullish. That’s all. 12 percent over five years is nothing spectacular.
12% over five years is essentially zero in real terms assuming that increases in the CPI (a rigged and grossly inadequate measure of inflation) continue at the 2.5% annual rate of the last ten years.
In nominal terms 12% is probably conservative, as it’s apparent that the current administration will stop at nothing to support asset prices.
In nominal terms 12% is probably conservative, as it’s apparent that the current administration will stop at nothing to support asset prices.
If inflation picks up then our debt load compared to GDP will skyrocket through the mechanism of higher interest rates. That will exacerbate the fundamental disconnect between taxes and expenses in our dear country, creating a distrust of the Govt as a honest debtor. We’ll have no more choice but to make more inflation to compensate, losing even more creditworthiness and so on until something gives.
The WSJ has turned into an unabashed cheerleader-I stopped reading it for anything but the reader comments, which are provided by businesspeople like myself. Here are a few comments to that article from various readers:
A rapidly recovering job market should soak up the excess inventory? Uh huh. Keep repeating that sentence. If you repeat it long enough you may induce the hypnotic effect necessary to ‘convince’ someone.
yes, the NAR fueled delusion continues.
Are these the same folks that failed to predict the home price collapse?
hahahahahaha – no one is really seriously making plans based on this, right?
The economists cited in the article are all smoking crack.
Who concocted this piece of nonsense?
No wonder this economy can’t recover, all the players are in blatant denial.
I could be wrong, but I could swear I saw a similar article in 2008 promising a rebound in 2009.
Of course home prices will rise next year: personal income is stagnant, unemployment is rising, the U.S. Dollar is strengthening, and demand is so weak that core inflation barely has a pulse. Is this the new math?
This “desirable areas” concept has a lot more slack to it than is typically acknowledged. The Castro was a bedraggled area before it gentrified. Hipsters have recently taken large swaths of North Oakland as their own. Even if demand in the City and the Bay Area as a whole remains strong, a significant amount of the pressure on properties will end up getting diffused by continuing flows of people with money into areas such folk would in the past have never seriously considered.
12 percent over next 5 ys is just inflation. This is not an investment.
Here’s a post at Dr. Housing Blog that shows the futures market for San Francisco:
http://www.doctorhousingbubble.com/futures-market-home-prices-real-estate-cme-case-shiller-may-2012/
Evidently shows a gradual uptick in San Francisco prices the next few years while cities like L.A. and San Diego have some more declines.
spencer wrote:
Of course, you can make all kinds of investments that don’t keep up with inflation. Since the annualized average return of the S&P 500 over the last ten years ending March 31, 2010 was -0.65%, lots of folks would be happy with 12% over the next five years.
[Spencer] said:
“12 percent over next 5 ys is just inflation. This is not an investment”
Yes and no. This may be a good time to self-direct IRA money into rental real estate. If you feel you have enough in stocks and are disappointed at a 1% return on your cash.
You can purchase good homes in growth job markets for 150K and get 1300 or more rent/month.
The return is more than the appreciation alone. If you get appreciation in this scenario that is icing on the cake.
@Gil
Agree that rental properties in other parts (even other parts of the Bay Area) that have had steep declines can now make some sense as investments.
But clearly virtually nothing in SF makes sense as an investment.
Agree that rental properties in other parts (even other parts of the Bay Area) that have had steep declines can now make some sense as investments.
But clearly virtually nothing in SF makes sense as an investment.
Yup anonm – I’m referring to a specific type of market and the Bay Area does not fit the model.
To be more specific, you need an area where jobs are going to grow over the next decade, population is growing and housing prices are in the 150K – 300K range. Areas like Dallas, Oklahoma City, Mobile and parts of the NW.
If someone has several hundred thousand in their IRA they can turn that into a self-directed IRA and purchase a rental property. The return after expenses can be 7% – 8% from rents alone.
Brokers as a rule tout stocks and bonds. Seldom do you find investment guys open the third option real estate.
You can do this with non-IRA moeny too but among my circle of friends quite a few have several huindred thousand in cash/bonds in their IRA. Few have anywhere near that amount in their non-IRA accounts.
Inflation is NOT a given in the next few years.
Paul Krugman, the quantitative easing apologist, says we are risking a Japan-style lost decade with our current trend towards deflation
Cash looks pretty nice right now. You can buy much more house on the foreclosure block with all cash than with a mortgage! The key is to keep your chips safe as long as this downturn lasts. First was US Subprime, then all US. Now it’s EU, next is China. After China, shopping season will begin.