Friday, October 19, 2012

America's Shadow Housing Continues to Shrink

According to new data from JP Morgan Chase, Americans may be shrugging off the foreclosure yoke once and for all, reports the Daily Beast.

The chart below shows that the number of delinquent mortgages is finally down to pre-2008 levels. The number of foreclosed real-estate units has also shrunk dramatically in the last couple of quarters. And the number of foreclosed homes repossessed by lenders (REO) is also down.

With the new Bernanke money printing, housing could be in for a steep price climb. The window to buy cheap housing is slowly closing.


  1. Why do we think that newly printed money will go into housing a second time??



    Surely this is what Bernanke and the Terrified Bankers want.

    But I can't find a single example of the same bubble reinflating twice in a row.


    Once burned, twice shy and all that.

    Middle incomes are declining in real terms... How does that drive up real estate?

    Is ADM buying up suburban neighborhoods to turn it back into farmland or what?

  2. We still have about 9m mortgages underwater. That is almost one fifth of the overall market. If home prices for some reason begin to decline again, that number of underwater mortgages increases quickly. Housing is recovering and you are one of the first to pound the table on it but it has a long way to go and substantial downside risks remain.

  3. I have read more than a few articles stating that banks are holding out on releasing foreclosures. Up to 90% have not been released yet! I'm sure the government and the banks are working together. The price of houses would collapse exponentially if a trickle effect were not in place.

  4. The window is...SLOWLY closing?

    What happened to the pleas and insistences that people lock in rates ASAP?

    Has the continual decline in rates forced you to change your anti-economic constancy based assumption of when rates will rise?

  5. #1 According to Bloomberg the percentage of investors in the housing market is now a hair below the record level of 28% in 2005, while the number of first time home buyers has dropped over the past 2 years.

    #2 Recent college graduates leave campus with an average of $26,000 in student loan debt, and for 20 years the percentage of recent collage grads in the labor force has dropped.

    #3 Do you still refuse to acknowledge that Corelogic stated in October 2012 that banks are refusing to foreclose on homes for an average of 867 days?

    I can't decide who is folds their housing pompoms with the most pride, Bill McBride, Joe Weisenthal or

  6. Housing prices are strongly correlated with income over time. Where is the income growth coming from to support higher prices?

    1. I think you make a good point. Especially in consideration of inflation in food and fuel long term, which will eat into income.

      I am not so sure we dont see a temporary bounce in housing prices only to see it deflate again because the underlying structure can not support it.

      They are having mild success in trying to re-inflate a housing bubble via inflation and low interest rates...but if the fundamentals are not there it does not matter. I think the leaking reserves end up going to more productive areas....we will see though. Wenzels call is bold if nothing else.

      I am happy with piling my money in to gold/silver and watching it all unfold.

  7. People like Bob who mentions housing recovery no matter how slow or weak are still laughed at hard, derided, bombed with boilerplate data and articles on internet written by people with half a brain as Bob has. This makes me very comfortable with holding my homebuilder and mortgage origination/servicing stocks. I noticed that these stocks are doing better coming off the 2011 lows. So far so good. I don't want too many people to believe in housing recovery. I want them to chase fancy tech stocks.