Reports from the Economic Front

a blog by Marty Hart-Landsberg

Making The Housing Crisis Real

If you are having trouble imagining the extent of the housing crisis, try these census bureau numbers (as reported by U.S.A. Today):

  • A record 1 in 9 U.S. homes (14 million housing units) are vacant, “a glut created by the housing boom and subsequent collapse.”
  • That number does not include an estimated 4.8 million seasonal or vacation homes, most of which are occupied only part of the year.  The combined vacancy rate is almost 15%.  This is higher than previous recession peaks: 11% in 1991 and 9.4% in 1984.
  • Homes priced at $500,000 or more are just as likely to be empty as homes that cost less than $100,000.

Now try these numbers from the real estate website Zillow (as reported by the Los Angeles Times):

  • Approximately 22% of American homeowners now owe more on their property than it’s worth.
  • U.S. home prices were down 14% in the first quarter of this year compared with the first quarter last year.
  • Those who bought their homes during the height of the bubble are in the most trouble; nearly 60% of mortgages issued in 2006 are now underwater.

A lot of personal tragedies lie behind these numbers.  They also mean growing state and local government budget shortfalls with negative consequences for far more people.

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