If you’re keeping score, homeowners are still losing the fight with the credit markets. However, there are signs we may be reaching stabilization and ready for an upturn later in the third or fourth quarters of 2008. Although foreclosure filings in February were up 60 percent year over year, they were down slight from January foreclosure rates. There were still nearly a quarter million foreclosure filings in February, signaling the end is not yet here. Also, 2007 saw a month over month decrease from January to February, leading some experts to believe there is still some time yet before the housing market settles.
On a national basis, there was one foreclosure filing for every 557 households in the U.S. in February. Nevada and California, which have seen some of the hottest real estate markets, saw much higher rates. Nevada saw one foreclosure filing for every 165 households, while California saw one filing for every 242 households in the state. Florida ranked a close third behind California.
Lawmakers are scrambling to find a fiscal policy which can help fight foreclosure rates. In particular, as adjustable rate mortgages continue to reset higher and lenders use stricter guidelines, homeowners are finding their mortgages increase. Until the credit markets quiet down, the housing markets will be rough for a while, which means consumer spending and overall economic activity will slow down.
With all these foreclosures, this makes it a great time to buy if you can find the right home in the right location. As we’ve said before, many homes in desirable areas such as Los Altos, Saratoga, Cupertino, San Francisco, and Palo Alto have seen stable prices or even continued increases in home prices. If you’re able to find a home that you plan to live in for the longer term, this is the best buying opportunity we’ve seen in decades.
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