More Dismal News on the Housing Front
On August 3, the National Association of Realtors' reported that its index of pending home sales declined in June to 75.7 from 77.7 in May and 93.0 in June 2009. This is more evidence on the dismal state of the U.S residential housing market and the ineffectiveness of the home buyer tax credit, which served only to accelerate planned purchases rather than stimulate new purchases.
Also, Lender Processing Services has released its Mortgage Monitor for June 2010, which shows that the percentage of mortgage that are noncurrent (delinquent or in foreclosure) was 13.20%, with 9.55% delinquent and 3.65% in foreclosure. These percentages translate in 7.14 million noncurrent mortgages. At least this was a slight improvement from May, when 7.26 million mortgages were noncurrent and is a considerable improvement from the market bottom in January 2010, when 8.12 million mortgages were noncurrent. However, the average number of days delinquency continued to set new records: 300 days for 90+ day delinquencies and 461 for foreclosures. There are 2.59 million mortgages in the 90+ day bucket, and it seems likely that most of these will ultimately end up in foreclosure during coming years, so the end of this crisis is nowhere in sight.
This crisis continues to be about location, location, location: 23.8% of mortgages in FL were noncurrent, 22.0% in NV, and 18.5% in MS. Only 15 states exceeded the national average, and 15 states came in at under 10%, led by ND at 4.6% and SD at 5.4%. IL was sixth worst at 14.7%.
The most recent report on the Obama administration’s Making Home Affordable Program documents that program’s ineffectiveness at stanching the hemorrhaging in the housing market. While 1.53 million trial modifications have been extended, more than a third have been cancelled, 364 thousand remain active, and only 389 thousand permanent modifications remain active.
So much for the Obama Administration's pledge “to offer help to 3 to 4 million homeowners by 2012.” To paraphrase another recent president, I guess it depends upon what the meaning of the word “help” is. It’s looking more and more like “help” means “help become a renter.”
