Economy Watch: Residential Mortgage Delinquencies Edge Down
- Nov 19, 2010
November 19, 2010
By Dees Stribling, Contributing Editor
The delinquency rate for mortgage loans on housing of four or fewer units stood at 9.13 percent at the end of September, according to the latest survey by the Mortgage Bankers Association. That’s a decline of 72 basis points from the previous quarter.
On the other hand, the percentage of loans on which foreclosure actions started during 3Q10 was up 23 basis points to 1.34 percent. Foreclosure mess or not, lenders seem to be pushing ahead, though the full impact of the documentation problems might not be visible until fourth quarter foreclosure numbers are tallied. The percentage of loans in the foreclosure process at the end of the third quarter was 4.39 percent, down 18 basis points from the second quarter of 2010.
Michael Fratantoni, MBA’s vice president of research and economics, predicted more of the same ahead in a statement: “Although the employment report for October was relatively positive, the job market had improved only marginally through the third quarter, so while there was a small improvement in the delinquency rate, the level of that rate remains quite high,” he said. “As we anticipate that the unemployment rate will be little changed over the next year, we also expect only modest improvements in the delinquency rate.”
BEA Confirms That Most States Had Lousy 2009
The U.S. Bureau of Economic Analysis has crunched numbers in a big way, determining that there was real GDP decline in 38 states in 2009, with durable goods and construction leading the downward spiral. The sharpest downturn was visited upon the five states of Great Lakes region, where the decline in real GDP was 3.4 percent. Michigan’s real GDP did worst in the region, dropping 5.2 percent.
Worst in the region, but not in the nation. The single state with the largest drop in GDP in 2009 wasn’t in the Midwest. It was Nevada, which experienced a decline of 6.4 percent in 2009. The contraction of its construction industry alone subtracted one percentage point from Nevada’s total economic output; the same was true for Arizona and Idaho, and Florida almost lost a GDP percentage point for that reason.
Oklahoma had the fastest growth in real GDP in 2009–6.6 percent–said the bureau, with the largest contributor to growth being mining. Mining was also the leading contributor to growth in Wyoming and Louisiana. Agriculture, forestry, fishing, and hunting were the leading contributors to growth in North Dakota and Nebraska, and collectively were the second largest contributor to growth in South Dakota.
OECD Trims 2011 Growth Estimates
Looking ahead, and toward the biggest of the big pictures, the Organization for Economic Co-operation and Development said on Thursday that the world’s economy would grow at 4.2 percent in 2011, down from 4.6 percent this year. The organization had predicted 4.6 percent growth for 2011 back in the spring.
Such factors as the still-laggard U.S. economy, possible debt blowups in the euro-zone, and “currency tensions” among nations will act as drags to the world economy, according to the OECD. But it also predicts that growth will bounce back to 4.6 percent in 2012.
Wall Street felt like a million bucks on Thursday–much more, really, since that’s small change on the Street–with the Dow Jones Industrial Average gaining 173.35 points, or 1.57 percent. The S&P 500 was up 1.54 percent and the Nasdaq advanced 1.55 percent.