Mortgage delinquencies keep rising nationwide as reported by Freddie Mac & Fannie Mae (via Calculatedrisk blog)
Until the delinquency rate starts to fall I seriously doubt home prices or new home construction will do anything beyond stumble along.
One hidden benefit from all the loans going bad is pre payment speeds have sped up for various mortgage backed securities. I have noticed a bump in principal paydowns beyond normal and I think its all the mortgages being purchased out of pools by the GSE's. Considering I own a wad of leveraged inverse floaters at below par I'm happy with that.
Delinquency rates keep rising for home mortgages. Calculatedrisk blog provides the details and they are universally not good. As you can see from the chart, delinquency rates have skyrocketed and are not slowing down.
If you have sensed a bit of bearishness throughout my blog entries so far, this hockey stick graph is one of the reasons. (I'm not always a pessimist, really) Rising delinquency rates are one of the impediments to a healthy growing economy.
From Calculatedriskblog a great post and several charts on how the home foreclosure and delinquency rates keep rising. Go over and read the entire post.
I agree with Calculatedrisk, until the deliquency rates start dropping we won't see any meaningful recovery in home prices.
Ran across this on my daily blog troll. I posted a while ago video by Hugh Hendry showing an empty skyscraper in China. This video completely trumps such small matters as a single building, here's an entire city.... empty!
I spent some time on Google maps and found satellite photos of empty Ordos. Wow. Scroll around and you will see just how big the place really is. Notice the new construction with no cars on the road or parked at the homes. From the shadows it appears around noon time so you'd think there would be some activity, right?
I think there is a little bit of malinvestment going on in China. When the populous does not have valid and efficient uses for their capital they end up buying apartments in empty cities. Makes the chinese pig farmer hoarding copper look entirely rational, eh? Like America property prices only go up in China, right?
Here's an article by the westerner interviewed in the video.
If this isn't a blatant example of a bubble, I do not know what is. When this bubble finally bursts the world wide ramifications will be tremendous.
