Downward Trend is Good News … For Now

In the real estate industry, you like to see things go up:
*Home Sales
*Home Prices
In the mortgage industry, you prefer to see things go down:
*Mortgage rates
*Delinquent homeowners
As you know from reading Chicagoland Real Estate Forum, long-term mortgage rates have just hit new record lows.
Now, a survey from the Mortgage Bankers Association (MBA) shows that the amount of borrowers that are 90 or more days past due on their mortgage payments dropped to 9.11% at the end of the second quarter; a decrease from 9.5% the previous quarter.
It’s a double-down!
To keep the news positive, I won’t tell you that last year’s second-quarter delinquency rate was 8% or that the MBA’s survey also showed that the percentage of homeowners that are delinquent by one month rose this quarter.
And, I won’t tell you that MBA’s chief economist, Jay Brinkmann, said that these short-term delinquencies could ultimately drive the number of foreclosures back up.
“Ultimately the housing story, whether it is delinquencies, homes sales or housing starts, is an employment story,” said Brinkmann. ” Only when we see a consistent increase in employment will we see an increase in sales and starts, and a sustained improvement in the delinquency numbers.
“Until we see the increase in the number of households that comes with an increase in the number of paychecks, all measures of the health of the housing industry will continue to be weak.”