Indeed, as Michael White previously pointed out (and I commented on here), whatever stabilization we're seeing in current housing prices may be an anomaly due the character of new purchases, and the trillions in government bailout cash that are propping up the economy. Worse, there's another issue that doesn't seem to be on anyone's radar at the moment. While it's one thing to be worried about declining home values no one seems to be looking at rising (and total) liabilities for the American homeowner.
Incredibly, according to the Sept. 17, 2009 Federal Reserve Statistical Release, total mortgage liabilities for the American homeowner (page 63 on the document, page 70 on the PDF scroll) are higher in 2009 than they were during the peak housing value years of 2006-2007. Yet, housing values have been going down.
Think about what this means. Since the market began it's collapse over a year ago very little new money has been lent out for new home purchases. Even less has been lent out for refinancing. We also know that housing prices have tanked from the 2006-2007 peak years. But Americans now carry more mortgage debt than they did before the market collapse?
Why is this happening? I'm not sure.
Can it be bigger (or more) refis? I doubt it. Are deliquent mortgage loans being reassessed with late penalties and fees tacked on? I have no idea. In all cases, something doesn't seem right.
Stay tuned.
- Mark
No comments:
Post a Comment