- 22 Oct 2023 06:27
#15292395
Signs that people are beginning to default on debt. This could be an indication of a looming recession, as the U.S. economy finally begins to "unwind".
Not really too unexpected, considering so much of this buying was being fueled by debt.
Home foreclosures are on the upswing nationwide
Home foreclosures up 34% from same time last year, which includes default notices, scheduled auctions and bank repossessions -- surged 28% in the third quarter to 124,539.
The report also indicated that there were 37,679 properties with foreclosure filings in September -- up 11% from the previous month and up 18% from 2022.
Although foreclosures are on the rise, they remain well below the levels recorded during the 2008 financial crisis.
Foreclosure starts are nearly back to where they were two years ago when the federal government lifted a pandemic-related moratorium on most foreclosure filings. This rise in foreclosures might also be attributed to pending filings finally processing.
The hit comes at an already precarious time for the housing market, thanks to the astronomic rise in mortgage rates over the past year. In fact, housing affordability is worse today than during the peak of the 2008 housing bubble.
Home foreclosures are on the upswing nationwide, Megan Henney, Fox News (Business), October 17, 2023
Americans Are Overdue With Their Car Payments At Highest Rate In Nearly 30 Years
Higher car prices and rising interest rates are hindering car owners’ ability to afford their vehicle payments, as 6.1% of subprime auto borrowers are at least 60 days past due on their loans, the highest percentage in data dating back to 1994, according to Bloomberg, which cited Fitch Ratings.
Margaret Rowe, a senior executive at Fitch, said subprime borrowers can be the first indication of where we start to see the negative effects of macroeconomic headwinds. Interest rates for used cars are 13.5% on average for those with fair credit but can rocket up to around 21% for those with the worst credit.
Americans Are Overdue With Their Car Payments At Highest Rate In Nearly 30 Years, by Antonio Pequeño IV, Forbes, October 21, 2023
older related thread:
Unable to afford homes, Americans dive into subprime auto debt
I predict we might also begin to see an uptick in defaults on student loan debt.
The Biden Administration postponed payments on student loan debt, but that cannot continue forever and set to stop soon.
Market analysts are also expecting defaults on commercial real estate loans in the next one to three years. Especially from office buildings in mid-sized cities that have less wealth. About 10 to 15% of total bank loans are on commercial real estate. Currently many of these buildings sit partially abandoned.
I think it is because many medium-sized businesses have been trying to cut costs because their profits are down, but also because remote work has become more common, where office workers work in their own homes and communicate through computer. Renting actual space in a building is expensive.
Not really too unexpected, considering so much of this buying was being fueled by debt.
Home foreclosures are on the upswing nationwide
Home foreclosures up 34% from same time last year, which includes default notices, scheduled auctions and bank repossessions -- surged 28% in the third quarter to 124,539.
The report also indicated that there were 37,679 properties with foreclosure filings in September -- up 11% from the previous month and up 18% from 2022.
Although foreclosures are on the rise, they remain well below the levels recorded during the 2008 financial crisis.
Foreclosure starts are nearly back to where they were two years ago when the federal government lifted a pandemic-related moratorium on most foreclosure filings. This rise in foreclosures might also be attributed to pending filings finally processing.
The hit comes at an already precarious time for the housing market, thanks to the astronomic rise in mortgage rates over the past year. In fact, housing affordability is worse today than during the peak of the 2008 housing bubble.
Home foreclosures are on the upswing nationwide, Megan Henney, Fox News (Business), October 17, 2023
Americans Are Overdue With Their Car Payments At Highest Rate In Nearly 30 Years
Higher car prices and rising interest rates are hindering car owners’ ability to afford their vehicle payments, as 6.1% of subprime auto borrowers are at least 60 days past due on their loans, the highest percentage in data dating back to 1994, according to Bloomberg, which cited Fitch Ratings.
Margaret Rowe, a senior executive at Fitch, said subprime borrowers can be the first indication of where we start to see the negative effects of macroeconomic headwinds. Interest rates for used cars are 13.5% on average for those with fair credit but can rocket up to around 21% for those with the worst credit.
Americans Are Overdue With Their Car Payments At Highest Rate In Nearly 30 Years, by Antonio Pequeño IV, Forbes, October 21, 2023
older related thread:
Unable to afford homes, Americans dive into subprime auto debt
I predict we might also begin to see an uptick in defaults on student loan debt.
The Biden Administration postponed payments on student loan debt, but that cannot continue forever and set to stop soon.
Market analysts are also expecting defaults on commercial real estate loans in the next one to three years. Especially from office buildings in mid-sized cities that have less wealth. About 10 to 15% of total bank loans are on commercial real estate. Currently many of these buildings sit partially abandoned.
I think it is because many medium-sized businesses have been trying to cut costs because their profits are down, but also because remote work has become more common, where office workers work in their own homes and communicate through computer. Renting actual space in a building is expensive.