The Current State of the Housing Market
The financial crisis has taken an immense toll on the economy, and the impact has beendevastating for millions of American families. Since 2009, 8.5 million foreclosure notices have been sent to American homeowners, the average home has lost $13,000 in value, and elevenmillion borrowers are “underwater,” owing more on their mortgages than their homes are nowworth.Although there have been some recent signs of life in the housing market, our economyremains stuck in neutral with 23 million Americans struggling to find work, persistently highunemployment that has stayed above 8% for a record 43 consecutive months, and real householdincomes falling more than $4,000 over the past four years. The weakness of the recovery has leftmany in America struggling to make ends meet, pay their bills, or stay current on their mortgage payments. Over 3 million households are currently in the foreclosure process or seriouslydelinquent on their mortgage.
While the national figures tell a story of a housing market that is starting to improve, itmasks the hardship that continues to be experienced locally. The impact of the housing crisis has been severe in some particularly hard-hit areas. In Florida, for example, 14% of all mortgagesare in foreclosure, representing 1 out of 4 foreclosures in the US.
In Nevada, the situation issimilarly dire, with 6% of mortgages in foreclosure and another 6% seriously delinquent (90+days late). Not only are 60% of Nevada’s homes underwater but Nevada, as a state, isunderwater, as the amount owed on Nevadan mortgages is greater than the value of all Nevadanhomes with a mortgage.
Despite an alphabet soup of federal housing assistance programs and an unprecedented period of record low mortgage rates, the current “recovery” means that housing’s contribution toGDP is only half of what it has been historically.
Mortgage Bankers Association, “National Delinquency Survey 2Q 2012,” 8/9/12
CoreLogic, “Corelogic Reports Negative Equity Decreases in First Quarter of 2012,”Press Release, 7/12/12
National Association of Homebuilders website,www.nahb.org, Accessed 9/20/12