WASHINGTON (Associated Press) – News from Washington, D.C., yesterday had its highs and lows, and, no matter how you looked at it, it spelled bad news for the national housing market.
Foreclosures Hit Record High
The Mortgage Bankers Association said the proportion of all mortgages nationwide that fell into foreclosure shot up to a record 0.83 percent in fourth quarter 2007. That surpassed the previous high of 0.78 percent set in the previous quarter.
Record Low for Home Equity
The Federal Reserve reported that homeowner equity actually slipped below 50 percent in second quarter 2007 and fell to just below 48 percent in the fourth quarter. This marks the first time since the Fed started tracking the data in 1945 that the amount of debt tied up in American homes has exceeded the equity homeowners have built.
Economy.com estimates that 8.8 million homeowners — about 10 percent of homes — will have zero or negative equity by the end of March. About 13.8 million households will be "upside down" if prices fall 20 percent from their peak.
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