209,413 New Listings - Last update: November, 26 2009 - 08:11 AM EST
The situation in the US is indeed grim. The economy is going through one of its challenging phases. With unemployment at its peak, home owners are faltering on mortgage payments. As a result, foreclosures have become very common. The Obama government’s $75 billion package to help homeowners seems to have no effect at all.
Till June, there have been 1.9 million foreclosures which is a 15 per cent increase from the first half of 2008. It has been estimated that one in every 84 houses has been foreclosed in early 2008. For the fourth month in a row in June, foreclosures exceeded
300,000. About 889,829 homes received foreclosure filings in the second half. This is the highest since RelatyTrac compiled its data in 2005.
Mark Zandi at Moody’s Economy.com says the Obama package did not have a significant impact. The plan has not been able to put a stop to foreclosures that are expected to continue till end 2009. In other words, one in every 34 homes has been foreclosed in California.
The primary reason for the increase in foreclosures is growing unemployment. As more Americans lose jobs or accept cut in salaries, they falter on mortgage payments. Subsequently, banks are taking over the homes.
What is worse, the price of homes is at an all time low. Home values are falling by the day. Homeowners are finding themselves at a loss. They find that they owe more to the banks than their homes are valued at. RealtyTrac says this has put the housing market at great risk. However, not all experts agree to this. Some observe that the housing market is showing signs of revival.
The stock of unsold homes is definitely on the decline, the group says. Towards May end, the inventory fell by 3.5 per cent to 3.8 million, signaling an increase in home sales. According to the National Association of Realtors, single-family home sales increased by 1.9 per cent in May as compared to April. All this shows that the housing market is on the way of recovery. Bernard Baumohl at Economic Outlook Group says that foreclosures will finally hit the rock bottom towards the end of 2009.
Brian Bethune, an economist at IHS Global Insight, says the US is going through one of its deepest recessionary phases. The topmost priority is to bring the economy out of this phase. The quicker it is done, the better it is for the Americans.
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4 Responses
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