You could make a very strong argument that the economy isn’t stabilizing, it’s getting worse. At least along some measures. Sure, we stepped back from the precipice of total collapse courtesy of massive government intervention, but some of the most basic indicators are only getting worse.
Bloomberg: Americans fell behind on their mortgages and banks seized homes at a record pace in the fourth quarter as unemployment rose to a 15-year high and real estate values tumbled.
Mortgage delinquencies increased to a seasonally adjusted 7.88 per cent of all loans, the highest in records going back to 1972, the Mortgage Bankers Association said today. Loans in foreclosure rose to 3.30 per cent, also an all-time high.
Meanwhile, it’s officially no longer a subprime crisis anymore. For the first time, prime delinquencies have surpassed subprime delinquencies.
As for new homes sales, April saw a modest .3% increased, but the March numbers were revised down from .6% to -3.0%, a huge change. As we noted yesterday, these revisions are significant because they indicate that the current data estimates are behind the curve on how bad things are. Watch for this month’s .3% number to be downgraded soon as well.
Oy. And then just think of what happens with that big mortgage rate spike we’re seeing.