If we were looking for the sea of foreclosures to start drying up, it's not happening yet.
The Mortgage Bankers Association reports today that a record 1 in 7.6 homeowners with a mortgage were either late making a payment, or in some stage of foreclosure from April through June.
Foreclosure numbers have been high — but what's chilling about these latest numbers is that many of those late or not paying at all are homeowners with everyday ordinary PRIME mortgages — those who have "skin in the game," as the saying goes. Good credit, money down, and they didn't get those super-high, soul-destroying, sub-prime interest rates.
Now we're talking about people who are losing jobs, or — in smaller numbers, most likely — people whose homes are underwater and who have decided there's no point in paying anymore. Karen Weaver, an analyst at Deutsche Bank, says they expect that nearly half of all mortgage holders will be underwater by the start of 2011 — that's revised upward from Deutsche Bank's current estimate of 27%. Unreal.
As an optimist, I believe that what's gone down will eventually come up. So unless I had a really cheaply-made shoebox of a house that was waaaay overvalued when I bought it (and boy, have I seen some of those!), I like to think I would sit tight, having faith that the market will rebound and prices will, too. Pessimists, feel free to burst my bubble.