Housing Snapshot

By DataAnalytics

Admits the arm-waving and ramped up rhetoric being shouted by the msm/real estate/banking and finance industry, we would like to remind the stuffed-suits that housing is not improving, not recovering and will remain depressed for a long time to come.

Out of approximately 45 Million residential mortgage holders in the U.S. there are roughly 18 Million outstanding mortgages that are in negative equity territory. Previously, it was thought and published that there were 12 Million underwater mortgages, but as it happens, the two main firms who collect that data were incorrect. Turns out, that nearly 40% of all outstanding residential mortgages are actually¬† ‘underwater’

Counting all housing inventory; existing, new and both disclosed and undisclosed shadow assets (to the best of independent analysis), there is approximately 7.5-/+ Million homes available. That equates to a total absorption rate of approximately 24 months and that figure could be as high as
60 months

Housing is still unaffordable, despite the fact that overall, prices have fallen about 35%. In order for median prices to be on par with median incomes in the U.S. the median house price needs to be at approximately $144,000. Currently, the median price is about $164,000, which is +12% or +$20,000
too high. Forget affordability, forget the ‘talking-points’ that the real estate and banking industry perpetrate, they are grossly incorrect and deceptive.

The FACT is, that there is little to no borrowing and purchasing power.
One of the main causes is due to the extremely high unemployment rate of approximately 12% (U3). While the total underemployment/unemployment (U6) is about 23%. Wages are flat, credit risk remains elevated and household debt is increasing. The debt-to-income ratios for the majority of would-be buyers is above 35%- which places many potential mortgage borrowers at a high risk of defaulting.

The facts are indisputable, even though the real estate and banking muppets claim otherwise. Of course, all of their arm-chair analysis is predicated upon a paper foundation that crumbles under the weight of truth. Truth will always trump lies and deception, eventually the truth gets out. The truth triumphs.

The main take-aways here to remember: Diminished Borrowing/Purchasing Power AND Years worth of Inventory. An equation that nets very little market absorption. Plus, a myriad of ancillary factors; Including, but not limited to massive unemployment, elevated levels of household debt and
an eroding economy.

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