Almost one in eleven Americans is at imminent risk of losing their home, as the housing crash continues to claim thousands of victims, more than three years after prices began to fall.
Data from the Mortgage Bankers Association show that almost 5% of all American homeowners are already in the process of having their properties repossessed, while another 4.5% are at least 90 days in arrears with their mortgage repayments. In total, that means more than 9% – almost one in eleven – are on the brink of being forced to hand back their keys, on top of the many hundreds of thousands who have had their homes repossessed since the crisis began.
"The underlying dynamic in the housing market is just dreadful," said Graham Turner, of consultancy GFC Economics.
Treasury Secretary Tim Geithner recently persuaded Congress to extend the homebuyers' tax credit – part of President Obama's $800bn (£485bn) stimulus package – until next April.
The scheme offers $8,000 to first-time buyers, but mortgage applications dropped off sharply in November, when it was due to expire. The White House, alarmed at the prospect of a renewed slump in the market, extended the credit, and opened it up to existing homeowners.
The US economy expanded at a healthy annual rate of 3.5% in the third quarter – though that may be revised down when new official figures are released this week. But Turner warned that without an end to the housing slump, any recovery will be short-lived, and the Obama White House will come under intense pressure.
"We're going to have a political crisis. Obama realises that you can't keep spending money when it's not even having much effect. It will come to a head when the current tax credit expires in April – then people will say, enough is enough."
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
