For those who are unaware, the US housing market is no where close to bottoming out. The housing collapse that happened during 2008-2009 was the result of both a large wave of delinquent “subprime” mortgages expiring and massive lay-offs. Little do people know that there is actually another massive wave of mortgages set to expire this year and peak in late 2011. Above is a chart that shows the monthly amount of mortgages that will be coming up for renewal. Unfortunately, since unemployment has yet to recede from its current levels, we expect a high percentage of people to be foreclosed on during this time. The article below is one of many popping up recently that addresses what I’ve mentioned thus far. In addition to this, please note that this chart was created in late 2009 so we are slightly more to the right of the “we are here” dotted line.
Rising sales, largely spurred by first-time buyer credits, have given people hope that the beleaguered housing market has finally hit bottom and is even showing signs of life. It’s been impossible, however, for me to get excited about this, considering that the number of people falling behind on their loan payments is growing, not shrinking. Unemployment continues to produce new delinquencies, and it’s been many quarters now since we were talking only about subprime mortgages. No, delinquencies are hitting regular old fixed-rate mortgages to borrowers with good credit, too.
– Lisa Gibbs, CNNMoney.com
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