So the US Mortgage Bankers Association is now predicting that the foreclosure crisis is coming to an end with national mortgage delinquency rate falling to 9.47% in the fourth quarter and the number of those just 30 days behind also declining.
Not so fast, that forecast is premature. Someone should tell MBA chief economist Jay Brinkman to have a cold shower.
Delinquency rates remain historically high and commentators like those here say it's too soon to tell. All lenders have done is slow the foreclosures down and prices have stabilized for now. There are still 4.5 million homes in the world's richest country that are either delinquent or in foreclosure.
As the Seeking Alpha blog points out, foreclosures will have to rise again. US businesses were left out of the banking bailout, a record 2.8 million homeowners faced foreclosure in 2009, and the number is expected to rise to between 3 and 3.5 million in 2010. That will in turn put downward pressure on property prices and the US housing market will continue to suffer.
Traditionally, construction has always been the sector that has taken countries out of recession. Think of the multiplier effect in that sector with suppliers, stores and tradesmen. So until that's fixed, a real recovery is unlikely.
And the only way that can be fixed is to get US unemployment down so that people will be able to meet their debts and mortgage payments.
no comment untill now