Half? Wow – That’s a lot of underwater housing….
by Tom on August 5, 2009
in Market Musings, house prices
While I’m not one to argue with analysts (even if I don’t agree with them), this is a bad number for the housing and mortgage markets. But, let’s say that they are off by a factor of 10%? So it’s only 38%? It’s still not a pretty number.
When you combine that with the potential problems (actually they aren’t potential, they are real problems) at Fannie and Freddie, it doesn’t bode well for the mortgage and housing markets.
So what? So:
- Don’t expect underwriting guidelines to loosen up any time soon. Like any time in the next 3 to 5 years.
- Don’t expect mortgages to get cheaper – yeah, rates will fluctuate, but the costs involved, the pricing adjustments for different risks and such will continue to get more expensive.
It’s going to be a wild ride, stay tuned.
Tom Vanderwell
About half of U.S. mortgages seen underwater by 2011 – Yahoo! News
The percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2011 from 26 percent at the end of March, portending another blow to the housing market, Deutsche Bank said on Wednesday.Home price declines will have their biggest impact on prime “conforming” loans that meet underwriting and size guidelines of Fannie Mae and Freddie Mac, the bank said in a report. Prime conforming loans make up two-thirds of mortgages, and are typically less risky because of stringent requirements.
