1 significant gauge of the housing market is that the foreclosure rate: the number of homes at foreclosure expressed as a proportion of the entire stock of privately owned houses. This speed is often quoted in economical reports to show the condition of the housing market and the general U.S. market. The more complicated the foreclosure rate, the more serious an economic recession, if one exists. However, researchers should approach historic comparisons with caution.
History
Foreclosure rates of the late 2000s are often compared with people of the Great Depression, that happened during the first half of the 1930s. But, there were not any public or private agencies keeping tabs on foreclosure prices at that moment. Indeed, the government still does not keep an official statistic on the number of homes at foreclosure or repossessed by lenders and banks. Rather, the generally accepted amounts on foreclosures are retained by the Mortgage Bankers Association.
Current Foreclosure Information
The MBA, a national association that represents the mortgage banking industry, has monitored foreclosures since 1990. Current information on foreclosures and mortgage delinquencies are seen at the agency’s Web page,”Economic Outlook and Forecasts.” A wealth of research, predictions and remarks are found through the hyperlinks provided on this page.
Depression-Era Information
A 2008 post by David C. Wheelock, an economist at the Federal Reserve Bank of St. Louis, mentioned yearly reports issued by the Federal Home Loan Bank Board throughout the 1930s. These reports reveal the foreclosure rate exceeded 1 percent from 1931 until 1935. In the bottom point in the Depression-era economic crisis, in 1933, about 1,000 home loans were being placed in foreclosure by banks every day.
Trends
Another important source of foreclosure data is RealtyTrac, a prominent California-based organization that reports present amounts. The data cited comprises the monthly number of new foreclosures, the monthly number of foreclosures offered and the average selling price of foreclosures. The present statistics are contrasted with those of the last month, or using the same month in the last year, to establish the tendency.
Default Rate
Another measure of the health of the home market is that the speed of loans in default. Such loans are 90 days in arrears, but the houses they secure are not yet in foreclosure. As mentioned by Wheelock, a poll by the Department of Commerce found that 43.8 percent of houses in 22 urban areas were at default. For houses with a second or third mortgage, that this rate had reached 54.5 percent. In contrast, the default speeds throughout the subprime crisis of the early 21st century reached a peak of around 3.6 percent of all residential mortgages.
