Rentals, Investment Homes Only Small Part of Foreclosure Picture

Rentals, Investment Homes Only Small Part of Foreclosure Picture
Las Vegas Business Press

A new study from the Nevada Realtors Association determined that more than 87 percent of home foreclosures are primary residences. That news runs counter to popular opinion that most foreclosures are the result of rental homes (8.1 percent) or investment properties (3.6 percent). Roughly 500 people statewide were surveyed in the study, which was conducted by SGS with NV Data Mine. More than 60 percent of foreclosures within the state came from married couples and 24 percent earned under $15,000 a year. More than 90 percent are single-family detached homes and 32 percent are between 1,500 to 2,000 square feet in size. Affordability remains a big issue. Around 34 percent of survey respondents said they were paying 56 percent of their monthly income on their mortgage, accounting for the largest group of foreclosures. Almost 24 percent of participants paid less than 40 percent of their monthly earnings on mortgage. More than 68 percent had lost a job in the year prior to their foreclosure, while 11.7 percent had unexpected bills and 7.8 percent had an addition to the family such as a relative move-in or a baby.

May Housing Starts Jumped 17.2 Percent
Wall Street Journal

Home construction climbed in May far above expectations, with single-family starts rising a third month in a row and giving more evidence of stability in the housing sector. Housing starts increased 17.2% to a seasonally adjusted 532,000 annual rate compared to the prior month, the Commerce Department said Tuesday. Building permits rose; apartment construction surged. The 17.2% increase was much bigger than expected. Economists surveyed by Dow Jones Newswires forecast a 7.0% increase to an annual rate of 490,000.

Where Were Regulators When Banks Were Failing?
USA Today

When ANB Bank of Arkansas failed last year, it was easy to blame executives whose pursuit of high-adrenaline growth led to the bank's demise. But now other key culprits have emerged in ANB's collapse: the government officials who were supposed to be policing the bank. The inspectors general at the U.S. Treasury and the Federal Deposit Insurance Corp. (FDIC) have both issued reports saying that bank failures surged because regulators in some cases didn't step in and prevent hazardous behavior, and in others actively helped banks hide their growing problems. As early as Wednesday, the Obama administration is set to release details of a new regulatory framework for the vast and complex financial system of commercial and investment banks and brokers that has evolved in the last few years. However, the recent reports from the inspectors general highlight that bank regulators failed to do their job properly even when supervising far simpler banking institutions, showcasing the difficulty the administration faces in ensuring the new supervisory system will work effectively.

Budget Woes, Building Drop-off May Prolong Calif.'s Hardships
Los Angeles Times

Despite some healing in the national economy, California still faces significant difficulty, in part because of the state's budget woes, economic forecasters at UCLA say. Unemployment in the state will reach 12.1% by the end of this year and will not return to single digits until late in 2011, economists predicted in the quarterly UCLA Anderson Forecast, which was set to be released today. Driving California's difficulties are a shrinking state budget, a disappearing non-residential construction market and sluggishness in housing construction.