Foreclosures appear to be following a “double-peak” pattern mirroring the double-dip pattern housing prices experienced, according to CNBC. Housing prices, as has been widely reported, plummetted at the outset of the recession but rallied briefly thanks to the homebuyer tax credit. Once it expired last year, all the gains were nullified, a recent report from Clear Capital shows.
Now, foreclosures, which spiked during the recession, but slowed in the last year thanks to an elongated process spurred by the “robo-signing” scandal, appear to be picking up again. Foreclosures are up 10 percent in June from May, according to Lender Process Services.
On first blush, that’s actually a positive sign, because foreclosed homes need to pass through the market before housing prices can stabilize, CNBC said. But new delinquencies also rose 2.4 percent in June, signaling an increasing number of underwater homes that will likely need to pass their way through the foreclosure pipeline.
And with economic indicators weakening across the board, CNBC said delinquencies may continue to increase and drag the housing crisis onward. [CNBC]