Housing Market Still At Risk

The economic recession we experienced across the nation was said to have ended nearly a year ago

. However, although the government has claimed to have done everything they possibly can, the condition of the housing market across the United States looks as dire as ever.

Mortgage payment Information posted for the end of March from the Mortgage Bankers Association shows us that just over ten percent of borrowers with a residential mortgage have missed at least one mortgage payment. That figure is up over half a percent from statistics gained at the end of 2009. The actual percentages are 10.06 percent at the end of March, which is a 0.59 percent increase from the 9.47 percent recorded just three months earlier. While the Mortgage Bankers Association cautions that seasonal adjustments more than likely distort the most recent figures and that the unadjusted seasonal statistics tell us that the delinquency rate has remained almost flat.

Seeing as outstanding mortgage debt across the nation has lingered at about $10 trillion, attempts to hold up housing prices has been overwrought with problems. Housing prices could be worse if it wasn't for factors such as, extremely low interest rates, large government mortgage purchases and loan-modification programs. Even with those efforts, housing prices across the nation have tumbled an estimated 20 percent.

Much of these problems are being driven by the high unemployment rates across the United States. With the creation of new jobs that are expected to increase during 2010, much of the housing market troubles should start to fade. However, investors should remain wary. If the market becomes flooded with a large amount of foreclosures, housing prices will decrease, which will result in an increase in mortgage defaults. These defaults will increase when more and more borrowers become underwater on their mortgage loans - meaning that they owe more on their mortgage than their home is worth - decide to walk away from their home before, they just can't afford it anymore.

by: Paul Escobedo

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