I have been asked how the market looks for housing.
Consider this, summer is seasonally the time when most home purchases occur. This uptick from month to month is not a relavent figure. Sales normally increase in July and August. There are too many problems even with prime borrowers. This latest uptick is the worst.
Now, even "prime" quality borrowers are falling behind on payments at a record pace. The delinquency rate on prime mortgages hit 3.71% in the first quarter of this year, according to the Mortgage Bankers Association. That's the highest since the MBA started splitting out subprime and prime borrowers back in 1998. The overall delinquency figures go much farther back — to 1979. They show the same thing:
A record high delinquency rate of 6.35%. Home prices are way down, but they show little signs of bottoming out just yet. How Many families can afford 48,000 a year to own a home in Orange County. Yes, intrest rates % are down but how much of a persons income will housing take, 50% or more, this is the fundamental problem. Figures from S&P/Case-Shiller reflect that home prices down 15.8% in May from the same month a year earlier. That's the largest drop on record. Prices fell in all 20 metropolitan areas the firm tracks. Las Vegas (-28.4%), Miami (-28.3%), Phoenix (-26.5%), and multiple markets in California (-24.6% in L.A., -23.2% in San Diego, and -22.9% in San Francisco) are leading the way.
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