US foreclosures up 53%, bank repossessions triple

Gruesome statistics by the bucketload are coming from the US housing sector. 252,000 homes are in foreclosure of some kind. That’s 1 in every 501 homes in the country. An unholy mix of falling property prices and rising payments is causing the carnage.

If you happen to think of the Great Suburban Dream, the Family Home, the young couple happily going over the threshold in their first home, this is murder by numbers. Bloomberg:

``The foreclosure problem is getting worse and will stay with us well into the next decade,'' Mark Zandi, chief economist for Moody's Economy.com in West Chester, Pennsylvania, said in an interview. ``The job market is eroding and homeowners have less equity. Lenders are much less willing to work with you if you've got negative equity, and you're more likely to give up your house if you're deeply underwater.''

About $3.5 trillion in homeowner equity has been wiped out since the spring of 2006, when housing prices were at their peak, Zandi said. Home prices fell the most on record in April, according to the S&P/Case-Shiller index of 20 U.S. metropolitan areas. June was the second straight month in which more than a quarter million properties received foreclosure filings, RealtyTrac said. Filings fell 3 percent from May.

The sheer brutality of the impact on the American economy can’t be described as much else but “asset genocide”. In terms of personal assets, the homeowners might as well have been lined up and shot. Bloomberg’s piece is very much like an autopsy. California, significantly, with huge commitments of capital in housing both by the industry and buyers, took another massive hit. The state has been top of the list of states in terms of foreclosure filings for 18 solid months. Meaning the world’s fifth largest economy is getting the rug pulled out from under it, in a big way. In California, the figure is one for every 192 homes. If the California economy gets hurt too badly, the US economy can expect to have a very nasty limp. It’s interesting, watching the American elections with this impressive array of absolute disasters and crashing institutions as the background. It’s a bit like watching the election of the president of the Titanic’s Social Club. Whoever gets elected Numero Uno Fish Foodstick, it’s getting kinda wet down there in the hold.