Last year Melinda Secor handed back the keys to her Sacramento apartment and started the hunt for some land where she could build a modest shelter and live as independently and cheaply as possible.
Secor is just one of the millions of Americans to have lost their homes in the two years since the current economic crisis began. While she and many like her are hoping that they will now be able to rebuild their lives, all the indicators are that the US housing market is set to get worse in the coming months.
Much worse.
The most recent data available from RealtyTrac shows that in July this year foreclosure filings – default notices, scheduled auctions and bank repossessions were reported on 325,229 homes. And according to the US Census Bureau the rate of homeownership fell to 66.9% in the second quarter of this year, the lowest since 1999.
This has happened despite interest rates being the lowest in modern memory and affordability, the highest in at least a decade, following price declines of up to 30 percent.
Of course the pain hasn’t been evenly spread. According to RealtyTrac 1 in every 397 houses across the country received a foreclosure filing in July 2010 . But the rate was highest in western states such as California and Nevada where the rate is one in 80 or 1.25 per cent.
And all that may be insignificant compared to the tsunami of repossessions waiting in the wings, say many forecasters.
Part of the problem is that even though the housing market has performed abysmally recently, temporary government tax credits have masked just how catastrophic the situation really is. The credits helped pull forward demand for housing. The scheme expired in April and as a result there is now less demand than ever, leaving the market ripe for another plunge in prices.
But in any case according to RealtyTrac nearly 15 percent of all household loans are already past-due or in foreclosure. 23 percent of properties with loans are in negative equity and another 5 percent of mortgaged homes have 5 percent equity or less.
The scale of the problem is quite staggering. Small wonder that RealtyTrac estimates that more than 1 million American households are likely to be foreclosed this year.
As a consequence, homelessness in the world’s richest economy has rocketed. Countrywide, the https://www.endhomelessness.org/ estimates around 670,000 are homeless each night. The homeless population living on New York City streets has gone up 50 percent in the past year, according to city statistics reported by the HellsKitchenLife.com blog. And a US government report found the number of homeless families in Los Angeles rose 30% between 2007 and 2009.