Mortgages defaulting, Land sales and prices steady
Not Feeling any Recession? Investors & Criminals
| How’s the US economy? Ask foreigners, buying US debt, even as housing -- actually land -- remains flat. Or ask criminals, oblivious to the recession. We trim, blend, and append five 2010 articles from: (1) MarketWatch, May 17, on foreign purchasing by Greg Robb; (2) TruthOut, May 19, on mortgages by Kevin G. Hall of McClatchy Newspapers; (3) AP, May 24, on home sales by Alan Zibel & Martin Crutsinger; (4) Associated Press, May 25, on home prices; and (5) Los Angeles Times, May 24,on crime by Michael Muskal. |
by Robb, by Hall, by Zibel & Crutsinger, by the AP, and by Muskal
- International purchases of US assets soar in March
Foreigners -- both foreign governments and private investors -- bought a record amount of US paper in March. Total holdings of equities, notes, and bonds -- both corporate and governmental -- increased a net $140.5 billion, the Treasury Department reported. This was up from $47.1 billion in February and beat out the prior record of $135.8 billion set in 2007 May.
The crisis in sovereign debt abroad may have played a role in the increase, analysts said. Also, the increase may be a vote of confidence in prospects for recovery in the largest global economy.
China was a net buyer of Treasurys for the first month since last September.
JJS: While some are upping their consumption and production, others are losing their homes.
- Prime Mortgages Going Bust at an Alarming Rate
The safest borrowers of fixed-rate mortgages accounted for nearly 37% of new foreclosures during the first three months of this year.
Additionally, more than one in 10 homeowners were behind on their mortgage payments in the first quarter -- a record.
The slide into foreclosure of the strongest borrowers is partly a function of the nation's unemployment rate, which is now 9.9%. The Great Recession has mowed down white-collar and blue-collar workers alike.
In Q1 compared to a year earlier, in states that weren't as high in the housing bubble foreclosure starts rose. Washington state posted the largest increase in foreclosure starts overall, followed by Maryland, Oregon, and Georgia. Washington state also posted the largest rise in foreclosure starts that involved prime and subprime adjustable-rate mortgages.
In 42 states and the District of Colombia, foreclosure starts for homes that were carrying FHA loans, which are considered among the safest, rose. Only nine states saw foreclosure starts for FHA loans fall. [sic their math]
JJS: A large number of foreclosed homes to sell means both land prices and employment will bounce around their bottoms for months to come.
- Rising home sales likely to cool despite low rates
A now-expired homebuyer tax credit and low mortgage rates -- thanks to foreigners buy US debt -- helped boost sales of previously occupied homes in April 7.6%.
The annual rate of home sales remains 20% below its peak in 2005 September and 27% above the bottom set at the start of last year.
The sales increase sparked a rise in home prices. The median price for a new home rose to $173,100, up 4% from a year ago. Yet as banks put more foreclosed properties up for sale, the number of homes on the market should grow. With supply growing and demand expected to fade, the prices should stay steady.
- Home prices fall in March
In the Standard & Poor's/Case-Shiller 20-city home price index, home prices fell 0.5% in March from the previous month.
In the first quarter of 2010 compared with the fourth quarter, US home prices fell 3.2%.
Nationally, prices have climbed nearly 3% from their 2009 April bottom. They remain nearly 31% below their 2006 July peak.
JJS: Common sense would tell you that fewer jobs means more crimes. But that’s not always true. Last year was a huge contradiction to common assertions.
- US crime rate continues to fall
Violent crime in the United States fell 5.5% last year, and property crime fell 4.9%, the FBI reported on Monday.
The federal statistics, compiled from 13,237 law enforcement agencies, show that violent crime fell for a third consecutive year, and property crime was down for the seventh year. The federal numbers are considered preliminary and will updated depending on what local agencies report.
The federal analysis shows that all four categories of violent crime -- robbery, murder, aggravated assault and forcible rape – were down from 2008. All four regions of the country showed a decline, with the South leading the way.
Big cities, those with a population of 500,000 to 999,999, had the largest decrease in violent crime – 7.5%. Non-metropolitan counties had the smallest decrease, 3%.
Murders were down 7.2%. Cities with a population of 25,000 to 49,999 were the only urban category to have an increase in murders, 5.3%. Non-metropolitan counties also had an increase, 1.8%.
Robbery dropped 8.1%, aggravated assault dropped 4.2%, and forcible rape was down 3.1%.
On the property side, the nation's biggest cities, those with a populations of at least 1-million people, reported the greatest decrease, 7.9%. Non-metropolitan counties were the only group to report an increase in property crime: 0.5%.
JJS: The economic indicator that has correlated with crime rate has been inflation. Once the huge public spending of recent years floods the markets household use, then keep an eye on crime. Meanwhile, let’s enjoy the lull.
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Editor Jeffery J. Smith runs the Forum on Geonomics.
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Also see: China Can't Buy Enough Bonds as Dollar No Deterrent
Drop in homeownership likely to continue
Pew study finds … |
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