Check out the four recent headlines below. These articles are from Bloomberg, Yahoo Finance and from some of the top financial blogs in the world. These articles should convince you that there is a new housing crash coming our way.
U.S. House Prices Face 3-Year Drop as Inventory Surge Looms
About 2 million houses will be seized by lenders by the end of next year, according to Mark Zandi, chief economist of Moody’s Analytics in West Chester, Pennsylvania. He estimates prices will drop another 5 percent by 2013.
House Prices decline 0.6% in July
Bank Repossession of Houses Sets New Record in August
According to CNBC:
The nation’s banks repossessed a record number of homes in August, according to industry sources. July’s repossession number was the second highest on record. The last highest was 93,777 in May of 2010.
House Prices Drop in 36 States; Prices to Stagnate for a Decade
Although home prices were flat nationally, the majority of states experienced price declines and price declines are spreading across more geography relative to a few months ago. Home prices fell in 36 states in July, nearly twice the number in May and the highest since last November when national home prices were declining,” said Mark Fleming, chief economist for CoreLogic.
Freddie Mac estimates house sales to fall another 23% in 3Q
Freddie Mac expects third quarter new and existing home sales to reach an annualized rate of 4 million, a possible 20.7% decline from last year and 23% drop from the previous quarter.
In its September economic outlook, Freddie said recent reports of plummeting home sales and near record-high delinquencies has shaken confidence in the “fragile” housing recovery. After the homebuyer tax credit expired in April, the National Association of Realtors (NAR) reported existing home sales fell 27% in July, and new home sales have fallen to the lowest point since 1963.
The bottom line; home prices are still too high – and they will be coming down another 15 to 20% or even more in some parts of the U.S.
Strategic Defaults will be on the rise. Many homeowners who held on during the first wave of foreclosures will be ready to walk away and give up on seeing their equity return anytime soon. Owning a home with little equity, or with an upside down mortgage is a huge incentive to just walk away and start over. Instead of making that $2,000 a month or more house payment, just move down the street and rent a house for $1,200 and pocket the difference. Many homeowners now understand that home prices are not going to rebound for over a decade.