On Thursday, the Mortgage Bankers Association released its home foreclosure and mortgage delinquency statistics for the first quarter. Somewhat surprisingly, were it not for just three states -- Ohio, Michigan, and Indiana -- the rate of loans in foreclosure would have been below the nation's average rate for the past decade.
According to the MBA, "While Ohio, Indiana, and Michigan account for 8.7% of the mortgage loans in the country, those three states account for 19.9% of the nation's loans in foreclosure and 15.0% of all the foreclosures started in the country during the first quarter." But without those states, which have been hit hard by reductions in manufacturing jobs, the percentage of loans in foreclosure would have been 1.12%, versus 1.19% during the past 10 years.
As a Texan, I find it particularly sobering to note that the foreclosures and foreclosure starts are above the rates in the Lone Star State in the 1980s during the oil bust. And the difficulties in the three Midwest states extend across all loan types.
The rate of total foreclosures initiated in the quarter was heavily influenced by jumps in four states: California, Nevada, Arizona, and Florida. Without those states, foreclosure starts would have declined nationwide. The MBA blames the high foreclosure starts in those states on the prevalence of speculators, who have been more likely than owner-occupants to walk away from properties whose values have fallen.
While I'm somewhat surprised by the mortgage bankers' trends and statistics, and without taking any comfort in the difficulties of others, I believe that the breakdown demonstrates that a housing recovery is likely to be region by region. Major builders like Pulte
Clearly, housing's widespread overall recovery isn't imminent, especially because the seven states mentioned above aren't trivial if we're to return to the health of the recent past. But at the same time, that very faint light out there may not actually be a train coming toward us.
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