Banks Hold 9 Years of Housing Inventory — Seeking Alpha


Banks Hold 9 Years of Housing Inventory

Tim Iacono submits:

I wonder how many homebuyers in the U.S. who, at this very moment, are rushing to get their sales contract signed before the government’s $8,000 tax credit expires on Friday, have even considered the relative importance of the tax credit today and the future impact of the foreclosure pipeline as illustrated in the chart below from this WSJ story.
As of March, banks had an inventory of about 1.1 million foreclosed homes, up 20% from a year earlier, according to estimates from LPS Applied Analytics. Another 4.8 million mortgage holders were at least 60 days behind on their payments … Based on the rate at which banks have been selling those foreclosed homes over the past few months, all that inventory, real and shadow, would take 103 months to unload.


The report goes on to note that the the government is worried about the situation, in part because their wildly un-successful Home Affordable Modification Program has been one of the major factors behind the inventory buildup.

Banks Hold 9 Years of Housing Inventory — Seeking Alpha

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