President Barack Obama's efforts to bolster the U.S. housing market may be undone by record unemployment and repossessions by lenders, according to an article on Bloomberg.com. Foreclosures are expected to reach 3 million this year, surpassing the record of 2.82 million in 2009, according to Irvine, California-based RealtyTrac Inc. That would more than offset an estimated 448,000-unit rise in home sales, based on the average forecast of the National Association of Realtors, the Mortgage Bankers Association and Fannie Mae.
The housing industry remains a challenge for Obama as he enters his second year of office and government assistance programs near expiration. Data this week showed home sales tumbled after the expected end of an $8,000 tax credit for first-time buyers boosted transactions the prior month.
Employers have cut more than 7 million jobs in the last two years, the biggest employment loss since the Great Depression. The U.S. jobless rate is expected to average 10 percent in 2010, according to the median estimate of 59 economists surveyed by Bloomberg. That would be the highest yearly rate in government records dating to 1948. Unemployment was 9.3 percent in 2009, the most in 26 years.
One in four U.S. homeowners holds a mortgage with a balance higher than the property's value. The number of borrowers with so-called negative equity reached 10.7 million, or 23 percent, at the end of the third quarter, according to a Nov. 24 report by First American CoreLogic, a California-based real estate research firm. Government programs to help underwater borrowers exclude jumbo mortgages that aren't eligible to be purchased by Washington-based Fannie Mae and Freddie Mac of McLean, Virginia.
Source: Bloomberg.com, Kathleen M. Howley
No comments:
Post a Comment