If you believe what T2 Partners has to say in this recent report the sane approach might be to continue to rent for the time being ---if you have that option. I realize it is human nature to always look for the silver lining and that we have suffered through almost two years of housing price devastation, but a study of the chart at the top of this post surely indicates more pain coming as ALT-A Option ARMS are re-set later this year and into next.
A couple amazing stats for the above mentioned T2-- Whitney Tilson research piece:
- 14%+ of all mortgages on 1-4 family homes were delinquent or in foreclosure in Q4 2009
- Of homeowners who haven't made a payment in a FULL YEAR- 23% haven't been foreclosed upon
- If home prices were to drop another 10%, the percentage of underwater homeowners would increase by 50%+
- HELOC delinquencies are soaring
I still believe a double-dip recession is in the works. Be careful out there.