Earlier this month we took a look at how foreclosures were at record levels for the April - June quarter, and according to new data, August was no better for homeowners. According to RealtyTrac Inc., there were a total of 243,947 foreclosure filings in August, representing a 115% rise from the same period last year.To get a better idea of just how hard Americans are getting hit, just consider this: during August, the national rate for foreclosures was one home out of every 510 households. While this figure is scary enough, it gets even worse for California residents. California had the largest amount of foreclosures of any state in the country with 57,875 foreclosures. That works out to one out of every 224 homes, and a 300% jump from last August.
The current trend is, unfortunately, not showing any signs of reversing itself. A big reason for the recent surge in foreclosures can be attributed to the large amount of adjustable interest rates that were issued during the housing boom in the early 90's. As these loans have gone through rate hikes many families are finding out the hard way that they just can't keep up their payments. It is estimated that there are going to be somewhere in the neighborhood of another 2 million of these loans adjusting higher before the end of this year. It definitely doesn't paint a pretty picture.
A few years ago as home prices were soaring, homeowners had the luxury of knowing that they could just simply flip their properties and take their profits without having to deal with their increasing interest rates. That is no longer the case, and is a big part of the reason why we are seeing the current foreclosure situation.
Just last week, The National Association of Realtors once again lowered their 2007 estimates for home sales. The NAR now thinks that existing home sales are going to decline by a total of 8.6% during the year, not the previously estimated 6.8%. With home sales on the decline, home prices are also falling. The lower national average means that many homeowners just can't sell their homes to get out of trouble.
Definitely some tough times out there, and while I believe that we are getting closer to seeing the housing market turn around, it would be foolish to think that things are not going to get worse before getting better.
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.
Just last week, The National Association of Realtors once again lowered their 2007 estimates for home sales. The NAR now thinks that existing home sales are going to decline by a total of 8.6% during the year, not the previously estimated 6.8%. With home sales on the decline, home prices are also falling. The lower national average means that many homeowners just can't sell their homes to get out of trouble.
Definitely some tough times out there, and while I believe that we are getting closer to seeing the housing market turn around, it would be foolish to think that things are not going to get worse before getting better.
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.
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Reader Comments (Page 1 of 1)
9-18-2007 @ 2:11PM
jAMES said...
tHE GOVERNMENT HASNT DONE ANYTHING BUT MAKE EMPTY PROMISES.ALL THAT IA NEEDED TO CORRECT THE PROBLEM IS MAKE ALL ARMS FIXED AT THERE PRESENT INTEREST RATE.THOSE PEOPLE WHOS LOANS HAVE ALREADY RESET MAKE THEM GO BACK TO PRE RESET INTEREST RATES.PROBLEM SOLVED.THE THING IS THE GOVERNMENT ISNT GOING TO DO ANYTHING-LOOK AT HEALTHCARE AND GAS PRICES.EVERYDAY SOMEONE IS LOSING THEIR HOME WHEN THEY SHOULDNT
9-18-2007 @ 2:17PM
jAMES said...
THIS IS TOO OUR GOVERNMENT OFFICIALS REPUBLICAN AND DEMOCRATES-YOU BETTER DO SOMETHING BECAUSE FOR EVERY HOME LOST IS TWO PERSONS WHO ISNT GOING TO VOTE FOR YOU OR YOUR PARTY
9-18-2007 @ 3:41PM
Liz said...
You know I never bought a house as I knew this was going to happen over a year ago. Plus where I live the houses cost a fortune and are not even worth it. But people are willing to sink everything they own into something as it might be the last one and they just have to have it. A house should be treated just like a business, there needs to be a plan. If you think there would be problems down the road, you shouldn't be buying it.
9-18-2007 @ 9:43PM
(^_^) said...
The fools that bought houses they couldn't afford are looking for someone to blame. Try the mirror.
10-01-2007 @ 11:05AM
TSmith said...
I work for CurrentForeclosures.com, a foreclosures site and have seen a huge increase in the number of foreclosures in the past 9 months. I believe it is a combination of not only sub-prime and ARM mortgages, but also the high number of people who have gotten loans with interest rates at an all time low... in addition to the rapid depreciation in some areas and the difficulty some are experiencing in selling their homes.