More St. Louisans lagging on mortgage payments
Here’s another sign that the mortgage crisis is not easing.
One in every 23 St. Louis-area borrowers (4.3 percent) was at least 90 days behind on mortgage payments in May, according to new data out this week from First American Core Logic. That’s a steep jump from the one in 33 (3 percent) recorded in the same month last year. It’s also up sharply from 3.6 percent in April, though those monthly numbers are somewhat volatile.
The number of loans in the foreclosure process jumped, too, to 1.1 percent in May from 0.8 percent a year prior. But the percentage of loans repossessed by banks in May fell, to 0.4 percent from 0.6 a year ago. That echoes other recent data suggesting that banks, in the St. Louis region at least, are acting more slowly to actually take over foreclosed homes - perhaps giving borrowers more time to work out loan modifications.
St. Louis is faring better than the nation as a whole. Across the country, 6.5 percent of mortgages are 90 days or more past due and 2.5 percent are in foreclosure. Those numbers have been growing faster than comparable St. Louis figure, a sign of relative stability in our region’s housing market.
While many housing advocates think the worst of the subprime mortgage crisis has passed, they report more borrowers having trouble keeping up with traditional prime mortgages because of job loss and falling home values. Those factors, some experts say, will keep mortgage delinquencies and foreclosures high for some time to come.
| St. Louis area | U.S. | |
|---|---|---|
| 90+ days delinquent | ||
| May ‘09 | 4.30% | 6.50% |
| April ‘09 | 3.58% | 5.10% |
| March ‘09 | 4.30% | 6.20% |
| May ‘08 | 3.00% | 4.00% |
| Foreclosure rate | ||
| May ‘09 | 1.10% | 2.50% |
| April ‘09 | 0.80% | 1.80% |
| March ‘09 | 1.00% | 2.10% |
| May ‘08 | 0.80% | 1.50% |
| Repossessed rate | ||
| May ‘09 | 0.40% | 0.70% |
| April ‘09 | 0.49% | 0.62% |
| March ‘09 | 0.50% | 0.80% |
| May ‘08 | 0.60% | 0.60% |
| Source: First American Core Logic |
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Things generally happen here in the midwest after most of the country has already experienced it…Probably the same thing here…Meaning, the worst has yet to come.
I have a down payment and would like to buy a house and help stabalize the market. However, I refuse.
These people aren’t paying their mortgage and the banks are not repossing the properties. How long before they get sick of letting people live rent free?
The future market will be flooded with foreclosure auctions from these defaulted loans. It would be dumb to buy a home today, as it would immediately lose value once all this shadow inventory hits the market.
Banks are delaying their repossession of defaulted loans; that means I have to delay my purchase of real estate and continue renting.
Brett-
We are hosting a free first time home buyer seminar that may show you why it truly is a good time to buy. Reply back if intrested.
How does falling home values affect someone paying their traditional mortgage, unless they chose not to pay it?
How many people are falling behind on purpose with the hopes of getting free help?
Theres a lot more going on here than just the segment of people who have lost their jobs…..
While it may be a good time to buy now, next year will be even better. Housing prices will be lower due to rising unemployment and this shadow inventory being held because of the lack of repossessions and foreclosures.
It makes no sense to buy a house for $200,000 this year when I can just buy it for $185,000 next year.
Falling home values affect someone paying their traditional mortgage in many ways:
If they become significantly underwater they become stuck in their home, unable to move unless they can come up with the difference. If they have a financial emergency they are less likely to be able take out a home equity loan. And of course they are overpaying in terms of their monthly payment.
Is your home really an investment? Do you really hope/need/expect to make money on the back end? Is that the determinant that drives one to buy a home these days? What about basic values such as shelter, quality of life, safety and privacy? I can’t see the future, but I imagine that home values will continue to fall, but that is only one part of the equation: rates, personal income, life goals, etc.
It’s bad, relative to 2005. It’s probably going to get worse…but picking the bottom won’t do as much for your pocketbook as it will your ego, methinks.
Making a house payment can be really tough especially when one of the homeowners has lost their job. My husband lost his job in August 2008 and we have struggled trying to keep up hoping not to fall 90 days behind. My husband was able to get a job in January 2009 but last month the hours were cut from 40 hours to 32. But making approximately $21K less a year really hurts when the house payment is based on the pre-layoff salary. Hopefully with God’s help things will work out for all those whose houses are on the line with the mortgage companies. A good paying job would help tremendously.
homeowner –
My basic values such as shelter, quality of life, safety, and privacy are provided for quite nicely by renting a house. So yes, buying a house is an investment decision.
I will help you keep the house that you were never really able to afford in the first place my child. But first, please stop spitting out kids and realize that it’s not such a bad thing to rent. Quit acting as if you deserve to live in a house.
I think Brett has been watching too many “flip this house” television shows. A house is not an investment that you purchase with the intention of making a quick profit - it’s your home, where the landlord doesn’t tell you that you can’t have a dog, or you have to move, or you have to move FAST because he lost the property in foreclosure, or your rents going up, but he can’t make any repairs or do any maintenance. It your home - where your wife makes wonderful memories for you at Thanksgiving, and you grow flowers for her in the backyard, where you raise your kids and have Cub Scout and Girl Scout meetings in your basement, and then you all have ice cream to celebrate a great meeting. Your street is where you get to know all your interesting neighbors, and where you cry when your kindergartner gets on the bus, with his little backpack. What are you thinking? You are missing out on a great experience - you might die of cancer next month or get killed in a plane crash - and missed out on the fun of owning a home. You know, following your logic - you should not buy a good steak, because it’s just going to end up in the toilet, anyway. Or you should buy a car, because next year that car will cost less - so just take a bus for a year! Or you shouldn’t buy nice clothes, because next year you can buy the $60 shirt for $1.00 at Goodwill. Before the real estate investment bubble, you had to live in your house for 7 years just to break even, when you figured in the maintenance costs, closing fees and sales commission. That’s where we are headed - back to old days. So go buy a house - and you’ll make money in your 8th year of ownership.