Foreclosures.com came out with its latest numbers today, a 63 percent rise in foreclosures for 2008, with a total of about 1 million throughout the year. The foreclosure process was begun on 2 million during 2008. Of those, 1.6 million were in the southern and western states as you can see by the chart above.
Alexis McGee, president of Foreclosures.com, believes the worst is behind the housing market. She’s says housing affordability is better than it’s been since 1994, when a mortgage on a median-price home equaled 18 percent of the median income. Dropping interest rates on mortgages have improved this even more. Plummenting housing construction and a growing US population ultimately mean an increased demand for housing. Unemployment, while rising sharply, is still below where it stood in the 1990-1991 recession and well below the highs of the early 1980s.
“Don’t expect another tidal wave of foreclosures this year, either, just because more adjustable rate mortgages are due to reset,” McGee says. “Current mortgage rates are at 30 year lows and dropping. Those who qualify will be able to refinance and enjoy lower monthly payments, not higher ones. Those that can’t will end up either selling their homes pre-foreclosure or losing them to foreclosure. But I am anticipating our market can absorb this inventory.”
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.