The MBA announced today in their quarterly delinquency report that a new record 13.16% of all mortgages were at least 30 days late or already in the process of foreclosure. This was an increase from the previous record of 12.07% during the first quarter of 2009.
The MBA's chief economist, Jay Brinkmann, was quoted as saying, "As for the outlook, it is unlikely we will see meaningful reductions in the foreclosure and delinquency rates until the employment situation improves." His prognosis, while not unique, is cause for concern as many economists don't expect the unemployment rate to peak until mid 2010. Banking analyst Meredith Whitney recently projected that unemployment could peak at 13%, something that would severely impact the banking system and housing market.
With all of the talk about a housing bottom, what the housing bulls continue to overlook is that the number of homes going into foreclosure continues to outpace the demand for them. According to RealtyTrac, foreclosure filing were up 32% year over year in July, while existing home sales were down -0.2% year over year in June.
You can't have a housing recovery when more people are losing their homes than there are people buying homes.