Americans worried about the housing market apparently have turned to their most trusted source for information: Google.
Search queries for “When is the housing market going to crash?” rose 2,450 percent from March to April, as nervous homeowners and their home-buying counterparts fret about the white-hot housing market, according to Market Watch.
Eye-popping Home Values Belie Deeper Inventory Problem
Headline after headline has focused on the stratospheric rise in home prices, with median list prices now topping $370,000 (up 16 percent year over year). However, the more troubling statistic is actually the vacancy rate, which is 53 percent lower than this time last year, according to realtor.com.
The vacancy rate reveals that a mere one million homes are currently for sale in the country, a level not seen since the 1980s, Wolf Street reported.
This anemic number has resulted in bidding wars over homes coming on the market, driving prices to dizzying heights not seen since 2006 — the year of the last housing bubble.
Foreclosure Moratoriums Coming to an End
High prices and tight inventories may have been sustainable in a more normal market, but looming on the horizon is an ever-growing delinquency rate as homeowners fall behind on their mortgage payments. A February report from AEI.org revealed that 17.5 percent of the 7.8 million FHA-backed mortgages are currently delinquent.
Historically, as these homeowners fell further behind, they would have been foreclosed upon, and their houses would have been placed on the market. However, these are far from normal times. Today’s housing environment is instead faced with a logjam in the form of a slew of forbearance periods and foreclosure moratoriums that are preventing banks from seizing homes.
Once the foreclosure moratoriums come to an end, there may not necessarily be a slew of foreclosures. Homeowners do generally have the option of tacking their delinquent payments on to the end of their mortgage.
However, with the unemployment rate hovering around six percent and three to four million Americans currently receiving unemployment benefits, it remains to be seen whether homeowners will be able to make their payments once the foreclosure moratoriums come to an end.
Clearly, the Google trends have revealed that many Americans are precisely concerned about a flood of foreclosures sweeping into this highly restricted market, which could drastically drive down home prices.
HUD Secretary Focuses on … Gender Identity?
The U.S. Department of Housing and Urban Development doesn’t appear to be taking these fears to heart, as Secretary Marcia L. Fudge instead is focusing her department’s attention not on the potential crash but rather on transgender home buyers.
“Unfortunately, transgender and gender non-conforming people report more instances of housing instability and homelessness than cis-gender people,” Fudge said Thursday in a media release.
“Today, we are taking a critical step in affirming HUD’s commitment that no person be denied access to housing or other critical services because of their gender identity. HUD is open for business for all.”
Secretary Fudge’s puzzling focus on transgenderism stands in sharp contrast to HUD’s response during the previous crash.
In 2008, then-HUD Secretary Steve Preston focused on the looming problem.
“Starting on July 14th, FHASecure will begin to provide additional assistance to subprime borrowers with adjustable rate mortgages, and help to restore liquidity and stability to the markets.”
“It will assist families who have missed up to three monthly mortgage payments over the previous 12 months or have experienced temporary economic hardship, such as loss of overtime or medical needs, as well as those who were affected by payment shock.”
Given the circumstances, liquidity and stability for the market may soon be in order.
Only time will tell if HUD leadership is up to the task of providing it.
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