Is the housing crisis going to end anytime soon? What is the future of housing industry in USA

The unsteady markets and declining home prices dipped an additional 99,000 Florida borrowers into foreclosure in the first quarter of the 2009, bringing the total number of home loans in some stage of the foreclosure process to 374,134. With 11 percent of its home loans in foreclosure, Florida ranked first in the country for defaults and was the only state in double digits. The rate was up roughly 2 percent from the previous quarter, according to figures released Thursday by the Mortgage Bankers Association. Oregonians' mortgage troubles in the first quarter of 2009 spiked to a level seen only once before in the past 30 years, according to a report released Thursday. The Mortgage Bankers Association report also shows 7.5 percent of Oregon's 636,000 outstanding mortgages were at least one month late as the recession pushes up layoffs across the state. Since record keeping began in 1979, the only quarter with a higher rate came in 1985 when a nasty recession rocked Oregon's timber-heavy economy. Compared with a year ago, the number of troubled mortgages has doubled to 47,700.

Including all loan types, the states with the highest overall delinquency rates were Nevada (11.75 percent), Mississippi (11.7 percent) and Florida (10.67 percent). The states with the largest percentages of homes in foreclosure included Florida (10.56 percent), Nevada (7.83 percent) and Arizona (5.56 percent). Topping the list of states with new foreclosure starts were Nevada (3.35 percent), Florida (2.79 percent) and Arizona (2.52 percent).

The genesis of the recession — risky adjustable-rate loans made to borrowers with bad credit — remains a significant factor in foreclosures. Today, almost half of all subprime ARMs are past due or in foreclosure. In Florida, New Jersey and New York the number is above 55 percent.

The national rate was 3.85 percent, up about half a percent from the previous quarter, which represented a record high. As builders compete against a backlog of foreclosed properties on the market, median new home prices fell to $209,700 in April, compared with $246,400 a year ago. Thirty-year fixed mortgage rates then settled in at 5.375 percent, with no points, up half a percentage point from 4.875 percent a few days ago. Sales of new homes were down 34 percent in April from the same month in 2008. Sales rose slightly in April from March, posting a 0.3 percent month-to-month gain.

The mortgage crisis is spreading and hitting new heights: Borrowers with good credit now make up the largest share of foreclosures as job losses and pay cuts exact their toll. As job losses mounted and incomes dwindled, more and more homeowners fell behind on their loans, with payment problems socking greater numbers of previously credit-worthy borrowers who have traditional mortgages. The worst of the trouble continues to be focused in California, Nevada, Arizona and Florida, which accounted for 46 percent of new foreclosures in the country and reported the worst delinquency and foreclosure rates on prime fixed-rate loans. The four have suffered massive job cuts in the housing industry. There were no signs of improvement.

But experts expect the pain to spread throughout the country as job losses mount. MBA's chief economist Jay Brinkmann estimates the unemployment rate will top out in mid-2010 and foreclosures to abate about six months afterward.

So to answer the question on whether the end of the crisis is in sight? The logical answer is no because :

1. Most of the ARM were originated in 2004 and 2005 with 5 year teaser periods. These would be ending in 2009 and 2010. Hence brining a new round of foreclosures
2. With interest rates rising again, people who would be able to purchase new homes would again reduce.
3. Unemployment rate is not slowing down.
4. Obama administration tax credit plan is not working since it is generally supposed to help people just out of college. These people are just not finding any new jobs in this market.

How is this news helpful for investors. Well, if you think about it, this is the best time to park some money from savings to stocks or mutual funds. When the market rebounds and the economy goes up, you will be among the happy ones! If you need help selecting an online brokerage firm, please visit http://www.comparebroker.com

Related readings: 1. Why Invest: http://www.comparebroker.com/why_invest.php 2. Should I invest now? http://www.comparebroker.com/should_i_invest_now.php