It has become increasingly clear that this huge and growing number of seriously delinquent homeowners may be the key to understanding where nearly every major housing market will be heading. It is not a pretty picture to contemplate. But ignoring it is no way to prepare for what is coming.
Guest author: Keith Jurow is the author of the MVP Housing Market Report. This article was posted at Minyanville with the title “Seriously Delinquent Homeowners Undermine Hopes of a Market Recovery.” According to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey released in mid-February of this year, nearly half of all nationwide home purchases in January …
Many homeowners see strategic default as their best option, and all major housing markets in the US could suffer. As home values continue to decline and loan-to-value (LTV) ratios rise, the number of homeowners choosing to walk away from their mortgage obligation will relentlessly grow.
It could take up to six years for the national average home price to reach a bottom. More rapid growth in employment is needed to avoid a drawn out depression for housing.