U.S. Home Vacancies Rise to Record on Foreclosures

[marmar]

from Bloomberg:



U.S. Home Vacancies Rise to Record on Foreclosures (Update3)

By Kathleen M. Howley

April 28 (Bloomberg) -- A record 18.6 million U.S. homes stood empty in the first quarter as lenders took possession of a growing number of properties in foreclosure.

The figure is 5.7 percent higher than a year ago, when 17.6 million properties were vacant, the U.S. Census Bureau said in a report today. The vacancy rate, the share of homes empty and for sale, rose to 2.9 percent, the highest in a series that goes back to 1956. About 2.3 million empty homes were for sale, compared with 2.2 million a year earlier, the report said.

The worst U.S. housing slump in more than a quarter century is deepening as falling values encourage buyers to delay purchases in hopes of getting a better deal. The median U.S. home sale price may drop 5.8 percent in 2008, the most on record, followed by another 4.7 percent decline next year, Fannie Mae, the world's largest mortgage buyer, said April 7.

``We think it unlikely that prices begin to stabilize until vacancy rates start declining,'' Jan Hatzius, chief U.S. economist at Goldman Sachs Group Inc. in New York, said today in a report for clients.

There were 129.4 million homes in the U.S. in the first quarter, the study said. In addition to homes for sale, the report counted 4.1 million vacant homes that are for rent and 4.7 million that are seasonal.

Most foreclosures are contained in the report's ``other'' category, which includes homes tied up in legal proceedings as well as homes that are empty because the owner is renovating and living somewhere else, according to the Census Web site. There were 7.5 million such homes that were vacant, up from 7.3 million a year earlier, the report said.

The U.S. homeownership rate was 67.8 percent, down from 68.4 percent a year ago, the study said. The rate has fallen or remained unchanged for six consecutive quarters.

New foreclosures have risen to an all-time high, led by defaults in adjustable-rate loans to people with poor or limited credit histories, according to the Mortgage Bankers Association. Home-price declines and tougher lending standards are making it difficult for owners who fall behind on their mortgage payments to sell or refinance into better loans.


http://www.bloomberg.com/apps/news?pid=20601087&sid=aqzpXxOX10sc&refer=home

[bdamomma]

1. spiraling out of control.

[shain from kane]

2. And think about the vacancies at motels this Summer, due to the price of gas.

[Warpy]

3. When enough housing has been rendered uninhabitable

by vandals, vagrants and vermin, the banks will have to realize that keeping the places occupied is the best policy. Renting them to foreclosed owners will keep cash coming in and having the places occupied will prevent them from getting copper plumbing and wiring stripped and the wrecks set on fire by squatters trying to stay warm.

It happened during the Depression and it will likely happen now, but the bankers are still dragging their Italian loafer clad feet.