California Housing Woes To Continue

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Trans Union, a Chicago based credit information company and one of the 3 largest credit reporting agencies in the U.S., reported this week that, “in the immediate future the percentage of California home loans that are delinquent by at least 60 days or are in foreclosure is projected to skyrocket to more than 14% by years end, up from 9.7% as of June”.

The delinquency rates for Los Angeles, Orange, Ventura, Riverside and San Bernardino counties is also expected to reach 14% by years end according to the same report, up from 10.7% as of June.

As of June, 14.9% of residential mortgages in San Bernardino County were at least 60 days late. And in Riverside County,  16.5% of home loans were at least 60 days past due.

Trans Union is also reporting good news saying the trend may finally reverse itself by the middle of next year. F.J. Guarrera V.P. in Trans Union LLC’s financial services group, in a statement said, “We think that’s about as bad as it is going to get”.

I find this hard to believe when I look at the big picture and find 1 in every 8 Americans is either behind in their mortgage payments or in the foreclosure process with this number inevitably being higher in California.

Mortgage rates are at 5.24%, for those that can qualify for the average rate.  California unemployment is at an all time high of 11.9% and growing, the fourth highest in the nation.  Add to this the state budget crisis, a rise in housing inventory as we watch major banks try to balance their books and a nation still in the process of recovering from a recession and you will agree that a reversal in the California housing market would be hard if not impossible to achieve by the middle of next year.

We are leaving the summer seasonal sales spike that included a stimulus package item for first time home buyers of an $8,000 tax credit that will end December 1, 2009 making home sales in California look brighter than the actual figures. It’s no surprise, then, that the state’s mortgage woes are far greater than the nation’s as a whole.

Related posts:

  1. Mortgage Delinquencies Continue to Increase
  2. California Legislation Tightens Restrictions On Lenders
  3. More Mortgage Woes Ahead
  4. ‘Seasonality Disorder’ In The Housing Market?
  5. Is The Canadian Housing Market Sustainable?

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