The Housing Market according to MSNBC

This was found on Yahoo and worth reading! A separate report showed that mortgage foreclosures surged in 2007 as many homeowners found themselves unable to keep up with sharp increases in mortgage payments and unable to refinance because their homes had lost too much value. Some 1.3 million homes were the subject of a foreclosure filing, up about 80 percent from 2006, according to RealtyTrac, a Web site that tracks foreclosures nationwide. More than 1 percent of all U.S. households were in some phase of the foreclosure process last year, up from about half a percent in 2006. Lenders are also feeling the pain. On Tuesday, Countrywide Financial, the largest U.S. mortgage lender, posted a larger-than-expected loss of $422 million for the latest quarter, as more homeowners fell behind on payments. Adding its name to a long list of mortgage lenders that have gone out of business or been sold, Countrywide agreed this month to be acquired by Bank of America for roughly $4.3 billion. Despite falling interest rates and some $100 billion in cash pumped into the global banking system by the Fed, credit remains tight as lenders worry about the risk of further losses from bad mortgage debts. Unless the tide can be turned to stop a coming wave of mortgage foreclosures, rising loan defaults this year will dump more empty houses on a market already glutted with too many. So far, tumbling mortgage rates have done little to revive the housing market. New home sales plummeted last year by the biggest amount on record — down 26.4 percent to 774,000, the Commerce Department reported Monday. The median price of a new home edged up only 0.2 percent in 2007 to $246,900, the worst performance since prices slipped by 2.4 percent in the 1991 housing downturn. With more than 1.8 million mortgages scheduled to reset to higher rates this year and next, the outlook for the housing market remains bleak as more foreclosed homes are put up for sale. A late-year surge in foreclosure filings suggests that many are in the initial stages of the foreclosure process, RealtyTrac said. “It does appear that we’re seeing a new batch of properties enter the process,” said Rick Sharga, RealtyTrac’s vice president of marketing.