Tuesday, May 11, 2010

Where Are We In The Housing Correction?

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.

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