Monday, June 1, 2009
US real estate situation
Partly driven by high unemployment, and in spite of various government measures to cut home loan rates etc, 12.07% of U.S. homeowners with a mortgage were either late paying or foreclosed at the end of Q1/2009, according to the Mortgage Bankers Association!
The economic and jobs situation has driven up foreclosures of the so called "prime fixed-rate loans". What is worth noting is that these loans are the loans made to the most credit-worthy borrowers and they make up 65% of the $9.9 trillion in outstanding first mortgages!
In Q1/2009, foreclosure actions were initiated on 1.37% of first mortgages, a record number!
All that in spite of the fact that the average rate on 30-year mortgages was 5.05% percent in January, 5.13%in February and 5.00% in March according to Freddie Mac, whereas a year earlier the average monthly rates were near 6%.