Mortgage And Foreclosure Crisis Won’t Peak Until Late 2010
Courtesy of Henry Blodget at Clusterstock/Business Insider
- The fastest growing segment of delinquencies is now prime mortgages
- Delinquencies and foreclosures likely won’t peak until the middle of next year
- Prices likely won’t stop falling until 2011
- The high end of the market will be the next to collapse
The percentage of prime loans going bad is climbing rapidly and nearing 10%:
Even fixed-rate prime loans are going bad:
Sub-prime delinquency growth appears to be leveling off (albeit at 40+%):
Delinquencies are super-high in some states but are very widespread:
Here’s Calculated Risk’s take on this. Click through for the full post and bigger charts.
On the MBA [Mortgage Bankers Association] conference call concerning the "Q2 2009 National Delinquency Survey", MBA Chief Economist Jay Brinkmann said:
- The problem is moving to prime loans, and fixed rate prime loans. Although the delinquency rate is lower for prime fixed rate than for other loans, these loans make up 65.5% of all loans – so the increase matters.
- Brinkmann expects delinquencies to peak in mid-2010.
- Brinkmann expects foreclosures to peak at the end of 2010.
…historically house prices do not bottom until after foreclosure activity peaks in a certain area. Since the subprime crisis delinquency rates might be peaking, it would not be surprising if prices are near a bottom in the low end areas. But in general I’d expect further declines in house prices – especially in mid-to-high end areas.
See Also From Calculated Risk:
Existing Home Sales Increase In July
More On Key Housing Trends:
Housing "Stabilization" Is The Mother Of All Headfakes
Half Of US Mortgage Holders Will Be Underwater By 2011
The Coming Nantucket Real Estate Crash