Home prices will be lower in two years compared to Q109 for much of the country’s metropolitan statistical areas, (MSAs) according to an economic trends report released by PMI Mortgage Insurance Co.
As many as 324 — just over 85% — of the country’s 381 MSAs are facing the risk of lower home prices in 2011. In addition, 28 of the top 50 MSAs are now in the report’s highest risk category.
Florida, California, Nevada and Arizona are home to 36 of the most risky MSAs, but other regions are not immune, according to PMI’s chief economist and strategist David Berson.
“Rapidly rising foreclosure and unemployment rates, continuing declines in house prices, and weakening consumer demand all worked to increase risk in the general economy, and the housing market specifically,” Berson says in a statement today. “As a result of the continued weakness in prices, and the relatively low level of interest rates, improvements in affordability across the nation’s MSAs will continue to incentivize repeat and first-time homebuyers back into the market.”
The MSAs most likely to see decreased prices are the Riverside-San Bernardino-Ontario, California, Miami-Miami Beach-Kendall, Florida, and Los Angeles-Long Beach-Glendale, CA regions.
The percentage of Los Angeles County mortgages delinquent by 90 days or more in May was nearly double the rate last year, First American CoreLogic reported today.
May's 9.5% delinquency rate for L.A. County was up from 5% of mortgages late by 90 days or more in May 2008. First American bases its foreclosure analyses on public records.
While the default rate has nearly doubled, the number of homes actually being sold at auction -- the final foreclosure stage -- has shrunk. In May, the L.A. County repossession rate was down to 1% of mortgages, from 1.1% a year ago. This discrepancy is the "foreclosure backlog" now looming over the housing market. It's caused by various government-mandated and voluntary foreclosure moratoriums, and possibly by lenders trying to manage the flow of repossessed homes entering the market.
Nationally, First American reported 6.5% of mortgages were in default in May, up from 4% in May 2008. The national repossession rate was 0.7% in May, up from 0.6% in May 2007.......
This foreclosure backlog story is starting to show up everywhere! I just wish the foreclosures would start showing up.