More Bad News on Housing FrontJuly 16th, 2009
At a time when the nation could use some good news about the economy, a real estate tracking firm reports a staggering new round of glum statistics about home losses in the United States. During the first half of this year, a record number of properties – 1.53 million – were in foreclosure or about to be foreclosed, RealtyTrac reported this morning. Alarmingly, that is nearly 10 percent more than the previous six months and about 15 percent more than during the same period last year. “What this means is, despite the intensity of the efforts on the part of government and lenders we don’t have a handle on foreclosures yet,” Rick Sharga, a spokesman for RealtyTrac, told CNNMoney.com. Perhaps the worst thing about the findings that that there were 1.91 million foreclosure filings – which equals about one of every 84 U.S. properties – is what it portends for the likelihood of an imminent housing recovery. There was no recorded improvement for June, the last month of the cycle. “More than 336,000 homes reported foreclosure filings, the fourth straight 300,000-plus month, CNNMoney.com reports, noting that filings were up 33 percent over last June and nearly 5 percent compared with May. “Foreclosure activity continues to increase to record levels,” James J. Saccacio, chief executive officer of RealtyTrac, said in a statement. “Unemployment-related foreclosures account for much of this increased activity, and the high number of borrowers who find themselves owing more on their mortgages than their homes’ are now worth represent a potentially significant future risk.” The raging recession is apparently the most powerful dynamo behind the housing problems. As more and more workers lose their jobs, the number of borrowers who are unable to make their payments grows. And, as home prices continue to tumble, an increasing number of homeowners owe more than their homes are worth, which in turn discourages some borrowers from repaying their loans.