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Mortgage Delinquencies are Up, But Situation Stabilizing

While there has just been a big jump in the number of homeowners just beginning to miss mortgage payments, it is trending downward, at 3.5% versus 3.8% in the same month a year ago.  Still, 4.3 million, or about 8%, of all homeowners are at risk of losing their homes.  This represents people three months behind in mortgage payments or already in foreclosure.

Federal government initiatives to help have not been as effective as hoped.  And, as the home buyer tax credits expired at the end of April, there are expectations for more foreclosures and fewer buyers, thus lower prices in the short term.  Mark Zandi, the chief economist at Moody’s Analytics predicts that home prices will fall another 5% and hit bottom next spring.  But, that’s a national number, and real estate is local.  With even the pessimists seeing stabilizing prices, and optimists predicting a bottom this year, it could be time to get off the fence and buy a home if you’ve been waiting.

A careful shopper armed with market data about their local purchase area should be able to beat the national numbers.  Improving on the 5% number even a little will position a buyer for the coming turn-around and future appreciation in value.  Of course, nobody can predict the future, but there are many analysts out there predicting a bottom within a year at worst, and a return to appreciation overall in three to five years. 

Don’t jump in without careful research, but it is definitely time to do that research.

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