Why you ask do things continue to get worse while the "experts" say the worst is behind us? Well I (and all of the other people who say we have a couple years of bad housing news) look at things like this graph here of interest rates being reset on loans. The light green are subprime loans which reset at much, much higher rates. Often two to three times, so imagine your monthly rent doubling or tripling! How long would you be able to hold on to your house?
What "expert" would look at this and say the worst is behind us? A cheerleader for the mortgage industry, a company hack who just wants investors to keep their cash in a sector that is bleeding money. Sadly, often its the same people who support these hacks who own the papers, so we see their "predictions" all over the place while real experts remain obscure and publish their predictions in academic or activist publications. It's really a sad state of affairs.
The interesting thing about the timing you see on this graph is that it suggests that the peak of resetting will happen right around the November election, and since it often takes people about 6 months or so to actually fall into foreclosure after the rates have gone up, whoever is elected president will find foreclosures peaking in their first year in office then dropping. So whatever they do or don't do, they will probably take credit for the sudden turnabout, but as you can see it is quite predictable and really much too late for any policies to really help outside of foreclosure prevention schemes that would cost the government way more money that it has, or would want to spend. I would also guess that if you are looking to buy a house, you might want to wait until late 2008 or even better after summer of 2009. After that the drop in home prices will probably just stagnate rather than rapidly fall much further as foreclosures will even out.
Home Sales Plunge by 8 Percent
Wednesday October 24, 10:19 am ET
By Martin Crutsinger, AP Economics Writer
Sales of Existing Homes Fall by Largest Amount on Record in Septemberhttp://biz.yahoo.com/ap/071024/economy.html?.v=8
WASHINGTON (AP) -- Sales of existing homes plunged by a record amount in September as turmoil in mortgage markets added more problems to a housing industry in its worst slump in 16 years.( Read more...Collapse )