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Foreclosure Crisis, No End In Sight

Published 05/01/08 Economy In Crisis - Print Article
E-mail - editor@economyincisis.org

Bad news for those thinking the housing epidemic would soon slow down…

"The slope is one direction. There is no sign of a bottom."

David Blitzer, Index Committee Chairmen at S&P reacting to the meta-index that measures home prices for 20 cities.

The prognosis is frightening. More and more mortgages continue to reset to higher rates as rising energy costs, falling home prices and stagnating middle class wages strangle the middle class in a slowing American economy.

And telling indicators continue to roll in, as many Americans lose their homes:

U.S. foreclosures in the first quarter more than doubled from a year ago, with one in every 194 households receiving a foreclosure filing in the three-month period

46 out of 50 states and 90 out of the country's 100 largest metropolitan areas are seeing an increase in foreclosures

3 out of every 1000 homes have been repossessed nationwide due to foreclosures in first quarter 2008, up 71% from a year ago

Las Vegas, Miami and Phoenix all saw housing prices plummet by at least 20%.

The U.S. economy has been confounded by the inflated and artificial wealth of home prices and credit, which has- up until now- helped to offset the stagnating wages and lower paying jobs available to middle-class and blue-collar workers.

The result of off-shoring, and sale of our industries- costing good-paying, high-benefit manufacturing jobs and replacing them with lower paying, poor-benefit service jobs, is rearing its ugly head.

Americans are not as wealthy as we thought we were- a folly only contributed to by a poor government track record on trade, and the underpinnings of a deeply flawed economic system sustained on borrowed foreign money.

Digging ourselves into this economic hole was much easier then it will be trying to dig ourselves out.

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