Foreclosures, Unemployment to Peak Next Year

MBA: Foreclosures, Unemployment to Peak Next Year
October 13, 2009, Associated Press

Foreclosures will peak by the end of next year and unemployment will climb above 10 percent as the housing market and U.S. economy grapple with the aftermath of the recession, the Mortgage Bankers Association's chief economist said Tuesday. Jay Brinkmann's forecast, released at the trade association's annual convention and expo in San Diego, envisions a slowly growing economy and improving housing market, with home price declines abating and fixed mortgage interest rates remaining below 6 percent.

Report Shows Foreclosures Increasing for High-End Homes
October 9, 2009, Wall Street Journal

More evidence that the foreclosure pain that began in overbuilt middle-class communities is moving higher up the real-estate food chain: The share of foreclosures in the most expensive third of housing markets is on the upswing. Around 30% of foreclosures are coming from homes in the top tier of the housing market, up from 16% when the foreclosure crisis began three years ago, according to new research from real-estate Web site Zillow.com. Meanwhile, the bottom one-third of the market now accounts for just 35% of foreclosures, down from 55% in 2006.

Roubini Says Home Prices Will Fall Further
October 9, 2009, Reuters via Yahoo

U.S. housing prices may still fall more than 10 percent, killing an incipient recovery, as demand from first-time home buyers fades, leading economist Nouriel Roubini said on Thursday. Roubini, one of the few economists who accurately predicted the magnitude of the financial crisis, said massive losses in commercial real estate loans will add to the problem, forcing banks to raise more capital.“The stress is moving from residential mortgages that are still in deep trouble, to commercial real estate, where they are just starting to recognize that they're going to have massive, massive losses," Roubini said. While he said that housing inventory may have bottomed out, Roubini argued that prices could drop more, despite the recent uptick in average home asking prices.