Something That I Didn't Know About The Housing Crisis

The news is full of information about the problems in the housing market, but the most interesting thing that I've read so far is something that I read in a recent article about the current crisis in foreclosures - that might have an impact on you, gentle and harried adults that you are (or might be):

According to the most recent foreclosure numbers released by the Mortgage Bankers Association (MBA), the U.S. is embroiled in the worst foreclosure crisis in recorded history. More than 14 percent of subprime borrowers are defaulting, and prime borrowers are beginning to follow suit.

MBA Report Summary

 

• The foreclosure rate recorded in the last quarter has increased beyond the highest point seen in the history of the MBA survey, which dates back to 1953.
• 14.82 percent of subprime borrowers are currently behind on their home loans.
• The highest percentage of foreclosures are on homes with 2/28 adjustable rate mortgages.

I found this on Homeguide123.  Shockingly, though, this is not the part that I'm referring to in the title.

These lines are the ones that shocked me.

'Many blame subprime lending for our current real estate crisis, but rampant speculation, even by those with great credit, played a leading role,' said O'Toole in a press release. 'The subprime market took the first hit as those borrowers had the least to lose when they walked away. Now that nearly half of foreclosures represent non-owner occupied properties, it is clear that speculators are walking away too.'

It is true that non-owner occupied properties have been hitting the auction block in record numbers. Of the 9,477 properties auctioned in California last month, 44.3 percent of them were speculator owned properties.

Another shocker: 90.3 percent of the homes were bought or refinanced in 2005 and 2006.

90.3 percent of the homes were bought or refinanced in 2005 or 2006.

I rent.  I'm very glad that I do at this point. 

Mid-2008 is sounding like a pretty good time to buy, however.