Monday, October 12, 2009
Foreclosures Threaten U.S. House Prices
After a three-year rout in the U.S. housing market, it is a big deal that house prices are rising for bank earnings and ultimately for consumer demand. Unfortunately, the housing market is too fragile to call a definitive bottom in the near term. Mortgage delinquencies continue to increase in the United States and foreclosures are gaining strength. An "ever growing pent-up supply of foreclosures in-process" is the "elephant in the room" says Ivy Zelman, housing analyst at Zelman & Associates based in Cleveland. Between 5.1 million to 5.8-million mortgages are at risk to foreclosure in the United States, according to a recent report by Zelman, a number so big that it threatens to swamp the current pace of single-family existing home sales of 5.1-million units per year.