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US mortgage industry analysts remain sceptical

Posted on 15 Oct 2009 | Comments Off

Home foreclosures, job losses expected to continue to rise

Despite mortgage rates below 5 per cent and signs that home prices have bottomed out in some places, executives and economists are decidedly downbeat about the US mortgage industry as well as the housing market it depends on.

The Mortgage Bankers Association said Tuesday that it expected US home foreclosures to continue to rise before leveling off late next year. The reason: Job losses have replaced subprime loans as the main cause of defaults.

Jay Brinkmann, the group’s chief economist, predicted that unemployment would rise through next summer, causing delinquencies to rise.

And because of the loss of income, he said, it will be increasingly difficult to keep troubled borrowers in their homes by modifying their loans. Continue reading →

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Tagged US Mortgage Rates, US Property Market

More in London want subsidised housing

Posted on 15 Oct 2009 | Comments Off

Number of applicants on wait list up 6%, the highest since 1999

The number of Londoners waiting for government-subsidised housing rose by 6 per cent to the highest since 1999 as the UK economy soured and the supply of new homes tightened.

‘The average rent in London is £206 a week, compared with £86 in a subsidised house or apartment.’

– Belinda Porich,

London regional head of National Housing Federation

The waiting list increased to 353,130 households in 2008, or one in nine London families, from 333,857 a year earlier, the National Housing Federation said in a report called ‘Home Truths’ published yesterday.

‘The economic situation is putting pressure on social housing,’ said Belinda Porich, London regional head of the federation, in an interview. ‘We are building way less than the number of people coming onto the list each year.’

The worst economic slump since World War II has increased unemployment, reduced home construction and raised demand for social housing in the UK capital. It’s a category that includes rent-subsidized, council apartments and houses and properties purchased using low-cost, government-backed plans.

The federation says there continues to be an ‘affordability gap’ in the UK capital. It estimates that the buyer of an average-priced home in London, which costs £362,810 (S$798,182), would have to have an annual income of £93,294. That’s based on a mortgage for 90 per cent of the property’s value and three-and-a-half times the buyer’s salary. Continue reading →